New Services draft meets with resistance

Original Publication Date: 
25 November, 2005

The Chair of the Services Negotiations (Ambassador Fernando de Mateo of Mexico) was bluntly told by five ASEAN countries Thursday 24 Nov that his (second) revised draft Ministerial text on services did not "enjoy consensus", and that Mateo's "dismissal" of the views of the ASEAN did not "fit together neatly with the claim in (the Chair's) cover note that the revised draft has been prepared on the basis of submissions by Members".

The views of the ASEAN countries (Brunei Darusalam, Indonesia, the Philippines, Thailand and Malaysia), were put forward at the formal Special Session of the Council for Trade in Services where the second revised draft text on Services was being commented upon.

Referring to the reply by the WTO Director-General Pascal Lamy last week to the open letter from NGOs, assuring the NGOs that the "views put forward by Members should receive even-handed treatment by the Chair," Malaysia which spoke for the five said "As such we do not anticipate a go-ahead of any text unless there was complete commitment from all Members."

Besides the blunt rejection (as lacking in consensus) of the Mateo text by the five ASEAN members, a number of other developing countries - such as Barbados, Jamaica and Rwanda on behalf of the African group - said that the new paragraph in the Mateo text on plurilateral approach should be so re-written as to make it clear it was a voluntary and not mandatory process.

In other comments, the EU reiterated its desire to see parts of the draft ministerial text strengthened. On the issue of modal commitments which members should strive to make, the EU has suggested that the current language for mode 3 supply of service be expanded and enhanced.

The EU wants the language for mode 3 to be the same as for modes 1 and 2, and say that commitments there should aspire to "existing levels of market access on a non-discriminatory basis across sectors of interests to Members."

The EU position was however opposed by several members including India, Chile and Mexico.

The section on modal objectives is now in para 1 of the draft Annex to be appended to the ministerial text on services.

The US has also proposed that the existing language on the modal commitments be strengthened to read "at least at existing levels of market access" as opposed to "at existing levels of market access."

Brasil pointed out that it also has problems with this part of the Annex. They find the current language on the modal objectives to be "too prescriptive and too specific." Proposals to deepen it, would add to their level of discomfort, Brasil said.

Several other developing country members such as Jamaica and Rwanda, speaking on behalf of the African Group also found the same problem with para 1 of the Annex.

The EU complained that the new draft was entirely silent on ambition in relation to the plurilateral approach contained now in para 7 of the Annex. The EU also proposed that the plurilateral approach be based on "critical mass."

According to a trade diplomat, many delegates were unclear as to what the EU had meant by this.

Brazil voiced its concern saying that they are still "not sure about the understanding of some members on this", so they need to be "cautious about it as well."

Other developing country members, such as Barbados, Jamaica and Rwanda on behalf of the African Group, pointed out that the new paragraph on the plurilateral approach be rewritten so that it is clear that this is a voluntary and not a mandatory process.

On the controversial issue of numerical benchmark, Brazil and others, welcomed that there is no longer any reference to this, in the draft Ministerial text. Brazil reminded members that they have extensively debated this issue in many consultations. However, "the demanders were unable to make their case and that they have poorly conceived their ideas." Hence, their proposals have been widely rejected by members.

Several other developed countries such as Australia, Norway and Japan on the other hand, want to see the numerical benchmark proposals especially that of the US and EU to be included in the report part of the draft text.

Many developing country delegates continue to question why the Chair, Amb. de Mateo insisted on retaining the reference to the sectoral and modal objectives contained in the Report of the Chairman to the TNC (TN/S/23). They have pointed out in previous meetings that this is unnecessary, since members are free to use this report as a guide in their negotiations.

At the end, the Chair said that he would take into consideration what was said today. He acknowledged that the text he has put forward is not a consensus text and that it has been put together on his own responsibility.