9:08 AM Jul 1, 1996

MARITIME TALKS 'SUSPENDED', TILL NEXT ROUND!

Geneva 29 June (Chakravarthi Raghavan) -- The collapsed talks for liberalising the maritime transport services have now been officially "suspended", to be resumed along with the comprehensive round of further negotiations on liberalising services which is to begin no later than 1 January 2000.

The maritime talks are the last of the three service sectoral negotiations that were continued beyond Marrakesh by a ministerial decision. The other two were on financial services and basic telecommunications.

The basic telecom talks, has been extended till after Singapore. A financial services accord, but with US entering across-the-board MFN exemption, was reached in 1995 to run till November 1997, when the whole question is to be reviewed, and all countries getting the option to follow the US example.

All three sectoral talks collapsed because of the US positions for commitments by other parties to full liberalisation in each of these within a specified or agreed time-period.

In the case of the maritime services, where powerful US domestic shipping lobbies are ranged against any multilateral accord, the US did not even table any offers, and dismissed those on the table as not sufficiently attractive and providing a critical mass of countries liberalising their maritime transport sectors.

As a result, the talks collapsed in mid-June (when a deadline set by others for the US went by without any US offers). Since then the Negotiating Group on Maritime Transport services (NGMT) has been engaged in finding a procedure to end the talks, without acknowledging failure.

Unless developing countries, participating in these 'voluntary' negotiations and who have put forward some offers already, exercise some of their options carefully and quickly, they might find themselves locked into a future negotiating process, with some fewer options and into a standstill on the basis of their existing offers on the table.

The NGMT decision, endorsed by the Council on Trade in Services Friday evening, provides for:

* suspension of the negotiations on maritime services and their resumption along with the commencement of a round of comprehensive negotiations for progressive liberalisation of services, envisaged in Art. XIX of GATS, and to conclude them no later than at the end of that round; the negotiations are to be 'resumed' on the basis of existing or improved offers.

* members participating in these talks, who wish to improve, modify or withdraw all or specific parts of their commitments and offers have to exercise this option within 30 days.

* any commitments resulting from the maritime negotiations will be inscribed in schedules of a country's specific commitments under GATS.

* the general commitment under GATS for MFN treatment (Art. II), and annex provisions on Exemptions (conditions for listing exemptions in a country schedule, periodic review etc) will enter into force in respect of international shipping, auxiliary services and access to and use of port facilities at the time the suspended negotiations are resumed and concluded.

During those negotiations, the effect of the suspension of Art. II for maritime sector will be kept under review by the Council for Trade in Services.

Any specific commitment on maritime services already inscribed in a country's schedule will not apply to the suspension of application of MFN provision.

* A Member may however improve, modify or withdraw all or part of its specific commitments in this sector (without going through the Art. XXI procedures and obligations), during a 60-day period to coincide with the conclusion of the (resumed) maritime sector negotiations. They will be able to finalise at that time their MFN exemptions in this sector.

* Beginning now, and till conclusion of these negotiations, a standstill will apply: Members are not to apply any measures affecting trade maritime transport services except in response to measures applied by others and with a view to maintaining or improving freedom of provision of maritime transport services, nor in such a manner as to improve their negotiating position.

Some observers say that unless developing countries (who under EU and other pressures) have tables offers or improved on them, exercise carefully their various options, they might find themselves locked into a process that is to begin in year 2000, and where the general negotiating guidelines etc are to be set before the commencement of new round of negotiations. The guidelines that prevailed in terms of the Uruguay Round and GATS may no longer apply.

Art XIX envisages that before each round of negotiations for progressive liberalisation of trade in services, negotiating guidelines and procedures are to be established, and the Council for Trade in Services is also to carry out an "assessment" of the trade in services in overall terms and on a sectoral basis, including those relating to the commitment in Art IV. to enable the increasing participation of developing countries in the services trade.

Though unstated, one of the understandings is that before the first round of services negotiations in 2000, the problems of statistical data on trade in services and directions of such trade would be resolved and statistical data base developed -- so that countries would be able to know the effect of any concessions they would make.

The Uruguay Round services negotiations took place on the basis of lack of clear data in this area. The current data is all based on the IMF balance-of-payments statistics which have many weaknesses.

While some work is going on among the OECD countries, most of it is non-transparent and does not involve developing countries or their statisticians with some trade policy knowledge.

At the instance of the then chief statistician of UNCTAD, Mr. Taj (who since has retired), this issue figured for a while on the UN system statisticians committee, and its reports used to be available to the Trade and Development Board. But with budget cuts, change of priorities etc, all these might have changed.

But without proper data, developing countries would be taking a leap in the dark on further liberalisation, proceeding merely on theoretical neo-classical assumptions about benefits of liberalisation to the liberalising economies. A proper methodology for data in national accounts, and their being reported internationally, would be needed. No clear answers are available from the WTO or UNCTAD on progress in this area.