5:51 AM Jun 6, 1995

FINANCIAL SERVICES, LABOUR MOVEMENT LINKED, INDIA INSISTS

New Delhi 3 June (TWN) -- Indian Commerce Minister, Mr. P.Chidambaram, has rejected the plea of the executive head of the World Trade Organization (WTO), Renato Ruggiero, that developing countries should not link their concessions on financial services to concessions from industrialized countries on the movement of natural persons in services.

During his visit to New Delhi this week, where he tried to press the Government of India to make concessions and improve its offers on financial services, Ruggiero had told a meeting of Indian industrialists that the two negotiations - that on financial services and on movement of natural persons as a mode for delivery of services -- should not be linked.

At a seminar at the Indian Institute of Foreign Trade this week, Chidambaram, without referring to Ruggiero, rejected this view.

At the Marrakesh meeting, he told the seminar, it had been decided that both negotiations - that on financial services and that on movement of natural persons would go forward side by side.

India was thus quite justified in linking the negotiations on the two subjects and demanding that the industrialized countries improve their offers on the movement of natural persons before they could expect developing countries to improve their own offers on financial services, Chidambaram said. The trading off of concessions in one sector in return for concessions in another sector was clearly envisaged in the Uruguay Round negotiations. The language used at Marrakesh in extending negotiations in the areas of movement of natural persons and on financial services clearly provides that on financial services members would be "free to improve, modify or withdraw" their offers in financial services. But in the case of movement of natural persons, the language used was for negotiations to continue "with a view to allowing the achievement of higher levels of commitment."

Thus, Chidambaram argued, member countries had to improve their offers on movement of natural persons before they could expect developing countries to improve their offers on services.

While vast amounts of capital were at stake in the services sector, the developing countries were merely seeking an opportunity. "We want our skilled professionals to move abroad and be able to provide the service," he said. The offers on the table were hardly satisfactory -- 65000 visas a year for all services, Chidambaram said. Europe had made no offers on movement of natural persons, Australia had put too many restrictions and Japan had made no offer either.