TWN Info Service on Trade and WTO Issues (July08/42)
28 July 2008
Third World Network

Trade: WTO services "text" still faces objection from four countries
Published in SUNS #6526 dated 28 July 2008

Geneva, 24 July (Martin Khor) -- A draft report by the Chair of the WTO's services negotiations has run into problems because of continuing strong objections from some developing countries on the process as well as the contents and even the very existence of the document.

The report contains a text-like 3-page annex which includes a paragraph containing language that members shall to the maximum extent possible bind current levels of liberalization (market access and national treatment) in the GATS and also provide new market access.

Apparently the text was agreed to at an Ambassador-level meeting of the so-called "Enchilande Group", which includes the US, EU, Japan, Canada, Brazil, India, China, Philippines, Indonesia, Malaysia, South Africa.

It was put forward by the Chair, Ambassador Fernando de Matteo of Mexico, at a services meeting on 17 July, where it faced objections from Venezuela, Bolivia and Cuba.

A meeting on Wednesday 23 July did not resolve the problem after the countries rejected the proposal of the Chair, Mexican Ambassador Mateo, to have the report adopted, while placing in a footnote that the countries have reservations to the document.

At the meeting, the three countries were joined by Nicaragua. The countries argue that modalities of services negotiations have already been established in the Hong Kong Ministerial Declaration, and it is wrong to establish another text on services modalities.

In their view, the Chair should restrict his report to providing a factual description of the views of members on the negotiations, and not to produce a "text" purportedly agreed to by members.

A report of the Chair, dated 17 July, contains a cover note of a few paragraphs and an Annex in the form of a text in which members state their position on the services negotiations.

The text contains a controversial Paragraph 4, in which members agree to a high level of ambition in services and that they shall, to the maximum extent possible, respond to requests by reflecting current levels of market access and national treatment and provide new market access and national treatment in areas where significant impediments exist. It also states that there shall be no a priori exclusion of any service sector or mode of supply.

When this report was presented to an informal services meeting on 17 July, the three countries again reiterated their objection to the document, while other members seemed ready to accept the report, with a few changes proposed by some members.

With the objection of the countries, the Chair has been unable to put forward a "consensus document." To deal with this problem, it was rumoured that he would suggest a solution in the form of noting the objection in a footnote.

At the meeting on 23 July, the Chair put forward almost the same Annex, with the main change being a footnote stating that "The delegations of Bolivia, Cuba and Venezuela have placed a reservation on this text."

This was objected to by the three countries, as well as Nicaragua. In a statement on behalf of the 4 countries, Venezuela's Vice Minister of Trade, Ms. Sohail Hernandez Parra, requested that the Chair's report include their views.

The countries wanted the report to include a few paragraphs that state that there is no consensus for a new services text, and that several delegations considered that there is no mandate to agree on elements that go beyond the Hong Kong Ministerial declaration. They want to add that there does not exist any obligation to respond to requests "to the maximum extent possible."

They also wanted the Chair's report to state that any language that modifies the current obligations of members is not legally binding, but that however there is agreement to immediately implement any treatment in favour of LDCs and small vulnerable economies.

Sohail Parra said the 4 countries wanted these points to be included in the report and in the "roadmap" (i. e. the annex of the Chair's report which seems to be in the form of a text), and not in a footnote.

Venezuela said its position remained, that it rejects that a text be negotiated as there is no necessity or mandate for such a text. It however supported a decision oriented to benefit LDCs and SVEs. It insisted that the Chair limit himself to present a factual report under his own responsibility.

It said the four countries wanted the Chair to clarify the nature of the document he had circulated. They do not agree that their views be characterized as a "reservation" to the text but they instead reject the text as a whole.

Bolivian Ambassador Angelica Navarro supported the Venezuelan statement, saying there is no mandate for a text in the report. In Hong Kong the modality for services negotiations had already been agreed, and we should not be pushing this exercise but implement the Hong Kong modalities.

Bolivia wanted just a report, not a text. To accept a report, it wanted the views of the 4 countries not in a footnote but as part of the report. Navarro quoted from a letter of Bolivian President Evo Morales that basic services such as water are the subject of human rights and should not be an object of private business or liberalization rules.

She wanted this to be reflected in the report, which she said should state that further discussion is needed on the subject of human rights and services as it is Bolivia's view that basic services related to human rights (including water, education and health) should be considered as a different category in the WTO and the country's position is to exclude these services from the GATS.

At the end of the meeting, the Chair asked the four countries to give him their proposed language for inclusion in his report. However it is understood that he would like to include this as a footnote, whereas the four countries would like their views to be placed in the body of the report. +