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Key WTO Members Start Talks On Work Program for Services

Tuesday, March 4, 2014

By Daniel Pruzin  

Feb. 28 — Key members of the World Trade Organization have initiated discussions on how services should be addressed as part of a future work program to advance the stalled Doha Round of trade talks, with delegations in general agreement that the services talks should no longer be sidelined in favor of negotiations on agriculture and industrial tariffs.

Fernando de Mateo, Mexico's ambassador to the WTO and chairman of the Doha negotiations on services, convened a meeting Feb. 24 of ambassadors from some 30 WTO members—dubbed the “enchilada group”—to begin talks on how services should be addressed in the future work program. The group includes the U.S., the European Union, China, Brazil, India, Japan and other major developed and emerging countries.

Officials in attendance at the meeting said that the ambassadors declared that they were prepared to participate positively to advance the services talks, that they wanted an outcome in services that was both doable and meaningful and that the level of ambition in services should match that in the other market access pillars of the Doha negotiations, agriculture and industrial tariffs.

No More Slow Track for Services

The representatives also stressed that discussions on services should no longer be put on the slow track but must instead progress at the same pace as those on the other two pillars. Officials noted that this position is an effective renunciation of the decision reached by WTO members at their 2005 Hong Kong ministerial to make agriculture and industrial tariffs the priority for Doha negotiators.

A short debate emerged over what specific items should be put on the negotiating agenda. Several delegations said that services linked to global value chains and green technology should be a focus for future negotiations, while India, which has pushed for improved commitments on cross-border movement of professionals, countered that WTO members should not be cherry-picking items for negotiation.

WTO members agreed at the organization's ministerial conference in Bali, Indonesia, last December to prepare a clearly defined work program within the next 12 months on the remaining Doha Round issues. WTO Director-General Roberto Azevedo followed up Feb. 6 by calling on de Mateo and the other chairmen of the Doha negotiating groups to consult with WTO members on the post-Bali work program and to provide some initial feedback to a General Council meeting on March 14.

The Elephant Called TISA

The Feb. 24 meeting also touched upon what some officials described as the “elephant in the room,” the separate negotiations among 23 WTO members on a Trade in Services Agreement (TISA).

EU ambassador to the WTO Angelos Pangratis gave a readout to delegations on the progress made at the last round of TISA negotiations, which took place in Geneva Feb. 17-24 and was hosted by the EU. TISA participants told the meeting that they were all committed to a multilateral outcome on services through the WTO, although the U.S. said that its immediate priority was conclusion of a TISA deal.

The TISA negotiations were launched in early 2012 by proponents of services liberalization frustrated with the continued stalemate in the Doha talks and the poor quality of the services market access offers put on the table when the Doha talks were still active.

The initiative met initial resistance from major emerging markets such as China, Brazil, India and South Africa, which warned that the TISA would harm efforts to revive Doha and undermine the multilateral trading system over the long term.

China, however, reversed course and submitted a request last September to join the TISA negotiations, saying it “identifies with the objective of the TISA negotiation, which is to reach a new services agreement with [a] high level of ambition.” China also noted that it was already the third largest services market in the world and that its participation in the TISA would help push the negotiations forward.

Officials said that previous criticisms of the TISA were notably absent at a Feb. 26 meeting of the WTO's Council on Trade in Services (CTS), with only Cuba and Venezuela continuing to voice opposition to the talks.

China Delay of Concern

China, though, is still not part of the TISA talks, as the U.S. and others insist that Beijing's bid to join needs to be carefully reviewed in order to ensure that China is ready to accept the same ambition on services liberalization as other TISA participants before it can participate.

One trade diplomat involved in the talks said that the U.S. appeared to be increasingly isolated in its opposition to China's entry into the TISA, with only Canada joining the U.S. in voicing reservations. In contrast, Chile has been up front in its criticisms of the delay, arguing that it will negatively impact efforts to get other countries to join the negotiations.

Uruguay's request last October to join the TISA has also been delayed by what critics claim are the unfair review procedures being imposed on new applicants after China submitted its bid.

Another official active in the negotiations dismissed suggestions of growing disquiet among TISA participants over China's delayed bid, arguing that the U.S. was not alone in continuing to scrutinize China's application and that it was fully within its rights to do so.

China for its part has not been pushing for action on its request for participation, officials noted, and the country voiced no complaints on the delay at the Feb. 26 CTS meeting. However, one services expert said that any extended delay could lead to China reconsidering its bid if progress on the TISA—and particularly its regulatory annexes and chapters—were to advance to such a degree that China would be confronted with a take-it-or-leave-it agreement.

Participants in the TISA negotiations are Australia, Canada, Chile, Colombia, Costa Rica, the EU, Hong Kong, Iceland, Israel, Japan, Liechtenstein, Mexico, New Zealand, Norway, Pakistan Panama, Paraguay, South Korea, Switzerland, Taiwan, Turkey and the U.S.

To contact the reporter on this story: Daniel Pruzin in Geneva at correspondents@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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