Nov 20, 1986
SERVICES NEGOTIATIONS - WHAT IT CAN AND CAN' T DO.
GENEVA, NOVEMBER 18 (IFDA/CHAKRAVARTHI RAGHAVAN)-- The considerable still to be done before undertaking any actual negotiations for a multilateral framework on services is reported to have been brought out at the first exchange of views on negotiations in the group of negotiations on services.The group of negotiations on services (GNS), which is chaired by Amb. Felipe Jaramillo of Colombia, held its first substantive meeting Monday afternoon, and is to meet again on December 12. A participant at the meeting said that the views of the various protagonists on what the compromise at Punta del Este implied showed that while they themselves were trying to keep to the compromise stuck by them, others not directly involved in the compromise were trying to go back to their original objectives. It was also clear that before serious negotiations could take place, many of the issues, raised in the earlier exchange of information on services and which had been put aside in the efforts to forge a compromise, would first have to be tackled before actual negotiations on a multilateral framework on services. These issues, the participant said, would include the problem of defining "services", "trade in services" and distinguishing it from "transactions in services". Some of these complexities, other participants said, came out in Monday' s discussions in the GNS, which focussed on the organisation of its work, and grant of observer status to international organisations. Four international organisations - the World Bank, the IMF, UNCTAD and SELA (The Latin American Economic System) - are reported to have so far sought such status officially. No decision on grant of observer status was reportedly taken, pending further consultations and time for participants to reflect on the implications of such a step, including the right of such observers. The Punta del Este declaration has provided that "GATT procedures and practices" are to apply to the negotiations on trade in services. And while participation in the negotiations are to be open to the same countries entitled to participate in the negotiations on trade in goods, the declaration provides that "GATT Secretariat support will be provided, with technical support from other organisations as decided by the group on negotiations on services". On the issue of organisation of the work of the GNS, and how to proceed further participants said that the discussions had centered on the actual mandate for negotiations, and the implications of the compromises reached at Punta del Este in agreeing to launch these negotiations. At the outset, Jaramillo is reported to have suggested that the work of the group should focus on five elements: Examination of national regulations in the area of services, the relationship of trade in services to economic growth and development, coverage of trade in services, the present barriers to trade in services, and role of other sector-specify international agreements and organisations in services. The Punta del Este declaration provides that "the negotiations shall aim to establish a multilateral framework of principles and rules for trade in services, including elaboration of possible disciplines for individual sectors, with a view to expansion of such trade under conditions of transparency and progressive liberalisation and as a means of promoting economic growth of all trading partners and the development of developing countries". The declaration also provides that "such framework shall respect the policy objectives of national laws and regulations applying to services and shall take into account the work of relevant international organisations". Participants in Monday’s discussions said that while some of the industrial countries talked about "liberalisation of trade", others, particularly those who had been involved in the negotiations that led to the compromise, underlined the need to observe the compromise fully in the negotiations. The principal parties involved in the compromise at Punta del Este were the U.S., India, Brazil and the EEC. In presenting its views on How the GNS should proceed with its work, the EEC is reported to have underlined that the objectives for negotiations laid down in the declaration should be fully observed, implying that formulations based on earlier ideas about the negotiations should not be pursued. The formulation in the Punta del Este declaration, the EEC is reported to have observed Monday represented fully the EEC views on the negotiations. There had to be a balance between the objective of trade liberalisation and development concerns. The objective of a multilateral framework in the EEC view, were not an end in itself, but only a means for "promoting economic growth of all trading partners and the development of developing countries". In this perspective, three main elements were involved: liberalisation of trade, respect for national regulations; and development-related issues. The negotiations on services should have broad-based participation, and the EEC would be prepared to listen to the views of each of the participant in this regard. India, while sharing "the underlying approach of the EEC" that the Punta del Este declaration reflected a balance, is reported to have underscored that the GNS was different from the GNG (the group of negotiations on goods in GATT). The negotiations on trade in services, and the establishment of the GNS to conduct it, had not been taken by the GATT Contracting Parties (CPS) or by ministers on behalf of the GATT CPS, but by all Ministers participating at the meeting in Punta del Este, whether they were GATT CPS or non-CPS. Also, unlike in the area of goods, there was no provision in the declaration for any standstill and rollback to cover the services sector, and there was "no benchmark" for a standstill and rollback. The declaration also provided for both an "umbrella-type" framework for services as a whole or a sectoral approach, and no priorities or preferences had been indicated by the ministers for one or the other approach. The expansion of trade in services "under conditions of transparency and liberalisation" was not an objective of the multilateral framework, but merely a means of promoting economic growth of all trading partners and development of third world countries. This objective was not a mere collective maximisation of benefits, but specific to each country. Any discipline to be evolved by a multilateral framework "shall respect the policy objectives of national laws and regulations applying to services", and thus such national goals and objectives were not a subject for negotiations in the GNS. -The negotiations had also to take into account the work done in other international organisations. The call for observing GATT procedures and practices, India is reported to have further underlined meant that the basic GATT practice of decisions by consensus had to be observed. Only this would ensure results satisfactory to all. The U.S. would appear to have underlined that the Uruguay round was "a single political undertaking", and it was necessary to take account of the interests of all participants. In the U.S. view the best way to proceed which the work of the GNS would be to discuss "a framework of rules". While this required flexibility on the part of all, the anchor for the negotiations would have to be the framework. The U.S. preferred adopting a "horizontal" approach to the exercise, implying an approach cutting across the various services sectors. Brazil is reported to have stressed that the negotiations must start from the assumption that every country had the right to regulate its services sectors. No country had so far developed a comprehensive framework of disciplines domestically for "services" as such, but only laws and regulations for specific service sectors. The Punta del Este declaration did not envisage "liberalisation" of trade in services as an end in itself. The objective of protection of national interests in services had to be clearly recognised. Sweden however stressed what it saw as the potential gains for all in expansion of trade in services, and the need to evolve an international framework for this purpose. The GNS, in the Swedish view, should try to identify the barriers to trade in services, and use the inventory of barriers to trade identified in the Tokyo round negotiations as a starting point. It was also necessary to look at policy objectives behind national regulations in services, and determine the "tradeability" of the services. Egypt however is reported to have questioned the efforts "to examine national regulations", when the declaration clearly provided that the proposed multilateral framework "shall respect" the goals and objectives of national regulations. Canada is reported to have suggested, that the objective should be to increase trade in services by reducing the barriers, and "improve access to world-class services". And while the Punta del Este declaration did not call for a standstill and rollback for services, in the Canadian view each participant should agree not to take measures that would improve its bargaining position. The EEC, India, and Yugoslavia were among those who however rejected this view. India is reported to have pointed out that when there was not even an agreement on what services were, and what the coverage of the negotiations in services, the talk about to improving one's negotiating position just did not arise. The EEC is reported to have agreed view. There could be no commitment for standstill and rollback on services, "since we cannot define what this means in terms of services", the EEC is reported to have said. Yugoslavia also insisted that there was no commitment to standstill and rollback in services, nor was there any question of "determining the barriers to trade". In Nigeria's view it was difficult to accept the presumption that GATT rules and principles might be applicable to services. Argentina is reported to have suggested that the starting point for their work must be sectoral understandings. Earlier, on the issue of granting observer status, Malaysia is reported to have raised the question as to what this involved, and whether "observers" could make interventions in the discussions. The chairman is reported to have clarified that any interventions by any observer would have to be on the basis of consensus. The EEC is reported to have suggested that observer status should be granted only to intergovernmental organisations with a multilateral character and not to regional or plurilateral organisations. Also, sovereign governments (seeking to be observers) should not have lesser status than international organisations. In the U.S. view, while international organisations could have a role in the discussions, they could have no role in the negotiations. While Switzerland reportedly favoured grant of observer status to UNCTAD, IMF and the World Bank, India is reported to have said that the GNS must first agree on the substance of its work, before it could decide on the grant of any observer status. Japan is reported to have lent support to the Indian view, while Cuba agreed that it was premature to take a decision on observers. However, Trinidad and Tobago insisted that the request of SELA could not be brushed aside. The chairman suggested that further informal consultations could be held before the next meeting to facilitate decisions on this issue.