GATS NEGOTIATIONS AND THE GATS NEGOTIATIONS AND THE DOHA DEVELOPMENT AGENDADOHA DEVELOPMENT AGENDA

African Regional Workshop on WTO African Regional Workshop on WTO NegotiationsNegotiations

Cape Town, 31 August – 2 September Cape Town, 31 August – 2 September 20052005

OUTLINE OF PRESENTATIONOUTLINE OF PRESENTATIONBackground to GATS Background to GATS

State of play of negotiations and issues State of play of negotiations and issues of concern to developing countriesof concern to developing countries

Considerations for Hong Kong Considerations for Hong Kong Ministerial ConferenceMinisterial Conference

ConclusionConclusion

BACKGROUND TO GATS BACKGROUND TO GATS AGREEMENTAGREEMENT

GATS frameworkGATS framework July FrameworkJuly Framework Negotiations on specific Negotiations on specific commitments/market accesscommitments/market access Negotiations on rules and domestic Negotiations on rules and domestic regulationregulationOther issuesOther issues

STATUS OF NEGOTIATIONS AND STATUS OF NEGOTIATIONS AND ISSUES OF CONCERN TO ISSUES OF CONCERN TO

DEVELOPING COUNTRIES IDEVELOPING COUNTRIES I

Based on July Framework Based on July Framework Negotiations on market accessNegotiations on market access

request-offer process – revised offersrequest-offer process – revised offers benchmarkingbenchmarking

STATUS OF NEGOTIATIONS AND STATUS OF NEGOTIATIONS AND ISSUES OF CONCERN TO ISSUES OF CONCERN TO

DEVELOPING COUNTRIES IIDEVELOPING COUNTRIES II

Negotiations on GATS RulesNegotiations on GATS RulesEmergency Safeguard MechanismEmergency Safeguard Mechanism Government ProcurementGovernment Procurement SubsidiesSubsidies

Negotiations on domestic regulationNegotiations on domestic regulation

STATUS OF NEGOTIATIONS AND STATUS OF NEGOTIATIONS AND ISSUES OF CONCERN TO DEVELOPING ISSUES OF CONCERN TO DEVELOPING

COUNTRIES IIICOUNTRIES III Other areas under discussionOther areas under discussion

AssessmentAssessment Reviewing progress in negotiationsReviewing progress in negotiations LDC ModalitiesLDC Modalities ClassificationClassification Articles IV and XIXArticles IV and XIX Capacity ConstraintsCapacity Constraints

Market access negotiations – considering initial offers Market access negotiations – considering initial offers

If considering submitting an initial offer, developing countries can take into account the following: If considering submitting an initial offer, developing countries can take into account the following: Offers involve the identification of sectors and modes where domestic supply capacity and Offers involve the identification of sectors and modes where domestic supply capacity and

institutional/regulatory frameworks can sustain the introduction of foreign competition. Therefore, it institutional/regulatory frameworks can sustain the introduction of foreign competition. Therefore, it is important to ensure that appropriate policy and regulatory frameworks for developing supply and is important to ensure that appropriate policy and regulatory frameworks for developing supply and export capacity as well as achieving other national policy objectives are in place domestically before export capacity as well as achieving other national policy objectives are in place domestically before considering liberalisation. Liberalisation should reflect national policy priorities and not go beyond considering liberalisation. Liberalisation should reflect national policy priorities and not go beyond the national regulatory and policy frameworks.the national regulatory and policy frameworks.

Prior to submitting an initial offer, at the national level there should be a review of the existing Prior to submitting an initial offer, at the national level there should be a review of the existing schedule from the Uruguay Round; assessment of any autonomous liberalisation; review of the schedule from the Uruguay Round; assessment of any autonomous liberalisation; review of the requests to determine the extent to which the offer should respond and identification of what can be requests to determine the extent to which the offer should respond and identification of what can be offered on a sector/sub-sector and modal basis in terms of market access, national treatment and offered on a sector/sub-sector and modal basis in terms of market access, national treatment and additional commitments (this includes consultations with stakeholders and determination of country’s additional commitments (this includes consultations with stakeholders and determination of country’s ’bottom line’).’bottom line’).

Developing countries can open fewer sectors; liberalise fewer types of transactions; only Developing countries can open fewer sectors; liberalise fewer types of transactions; only progressively extend market access; and attach certain conditions to whatever market access is progressively extend market access; and attach certain conditions to whatever market access is granted. granted. Examples of conditions include: Examples of conditions include:

Requirement for joint venturesRequirement for joint ventures Foreign companies required to establish subsidiariesForeign companies required to establish subsidiaries Nationality requirements for suppliers of servicesNationality requirements for suppliers of services Set percentage of locally engaged workforceSet percentage of locally engaged workforce Requirement to train local staffRequirement to train local staff Research and developmentResearch and development Use of latest technology requirementsUse of latest technology requirements

Market access negotiations – considering initial Market access negotiations – considering initial offers offers

Other broader issues which need to be taken into account when considering whether to submit an initial offer Other broader issues which need to be taken into account when considering whether to submit an initial offer include:include:

- Given the submission of offers can trigger further requests, followed by revised offers, it is advisable that - Given the submission of offers can trigger further requests, followed by revised offers, it is advisable that initial offers do not present the full commitment which the country is willing to undertake, in order to allow initial offers do not present the full commitment which the country is willing to undertake, in order to allow space for improvement and enhance the negotiating position. space for improvement and enhance the negotiating position.

- Once binding of commitments take place at the WTO, they are reinforced by the dispute settlement - Once binding of commitments take place at the WTO, they are reinforced by the dispute settlement mechanism and therefore it is difficult to go back on these commitments regardless of the circumstances mechanism and therefore it is difficult to go back on these commitments regardless of the circumstances (GATS Article XXI procedures would have to be initiated which is a cumbersome process requiring (GATS Article XXI procedures would have to be initiated which is a cumbersome process requiring compensation to affected Members). Therefore developing countries should retain as much flexibility as compensation to affected Members). Therefore developing countries should retain as much flexibility as possible by offering less than or equal to the status quo (if appropriate). It has already been mentioned that possible by offering less than or equal to the status quo (if appropriate). It has already been mentioned that developed countries often reflect the status quo of liberalisation in their countries rather than go beyond - this developed countries often reflect the status quo of liberalisation in their countries rather than go beyond - this to also retain some degree of flexibility. to also retain some degree of flexibility.

- Importantly, given that rules on subsidies, a possible safety net measure such as an emergency safeguard, or - Importantly, given that rules on subsidies, a possible safety net measure such as an emergency safeguard, or disciplines on domestic regulations have yet to been developed, as previously mentioned retaining a degree disciplines on domestic regulations have yet to been developed, as previously mentioned retaining a degree of flexibility is even more critical for the future.of flexibility is even more critical for the future.

- Offers can also be used for providing technical clarity and refinement to a country’s schedule of - Offers can also be used for providing technical clarity and refinement to a country’s schedule of commitments so as to increase transparency and predictability - which can also contribute to the value of the commitments so as to increase transparency and predictability - which can also contribute to the value of the offer. offer.

- In light of the above, offers should also be submitted on a conditional basis dependent on - In light of the above, offers should also be submitted on a conditional basis dependent on a number of a number of things including the evolution of the negotiations generally, the offers that will be presented by the other things including the evolution of the negotiations generally, the offers that will be presented by the other WTO Members, progress in other areas in the GATS negotiations (i.e. GATS rules) and not prejudiced by WTO Members, progress in other areas in the GATS negotiations (i.e. GATS rules) and not prejudiced by outcomes of discussions on classification issues. It should also be indicated that the country reserves the outcomes of discussions on classification issues. It should also be indicated that the country reserves the right to modify, add on or remove all or part of the offer in the future and reference could also be made to the right to modify, add on or remove all or part of the offer in the future and reference could also be made to the fact that developing countries are entitled to special flexibility provided by the GATS as discussed earlierfact that developing countries are entitled to special flexibility provided by the GATS as discussed earlier

CONSIDERATIONS FOR THE HONG CONSIDERATIONS FOR THE HONG KONG MINISTERIAL CONFERENCE IKONG MINISTERIAL CONFERENCE I

Market access negotiationsMarket access negotiations continue to identify areas of interest and priority for African countries in trade in services;continue to identify areas of interest and priority for African countries in trade in services; critically examine revised offers of developed countries in sectors and modes of export critically examine revised offers of developed countries in sectors and modes of export interest to identify whether Article IV is being implemented; interest to identify whether Article IV is being implemented; analyse proposals on benchmarking and their implications for African countries;analyse proposals on benchmarking and their implications for African countries; resist benchmarking proposals which alter or threaten developing country flexibilities; resist benchmarking proposals which alter or threaten developing country flexibilities; consider development orientated benchmarks as an alternative;consider development orientated benchmarks as an alternative; if submitting initial offers, do so on a conditional basis, based on national development if submitting initial offers, do so on a conditional basis, based on national development objectives and priorities, plus ensure proper classification and utilise development objectives and priorities, plus ensure proper classification and utilise development conditions;conditions; LDCs should not submit to pressure for initial offers in this round and focus on LDCs should not submit to pressure for initial offers in this round and focus on implementation of the modalities and the rules aspect of negotiations; andimplementation of the modalities and the rules aspect of negotiations; and LDCs should consider options for implementing ‘special priority’ in market access under LDCs should consider options for implementing ‘special priority’ in market access under the Modalities.the Modalities.

CONSIDERATIONS FOR THE HONG CONSIDERATIONS FOR THE HONG KONG MINISTERIAL CONFERENCE IIKONG MINISTERIAL CONFERENCE II

Domestic regulation negotiationsDomestic regulation negotiations

ensure obligations on the right to regulate based on national policy ensure obligations on the right to regulate based on national policy objectives are strong and binding objectives are strong and binding

have proper SDT measures as well as for difficulties in implementing have proper SDT measures as well as for difficulties in implementing disciplines disciplines

carefully analyse necessity tests provisions to not infringe right to carefully analyse necessity tests provisions to not infringe right to regulateregulate

consult with domestic regulators on feasibility and scope of discipline consult with domestic regulators on feasibility and scope of discipline elements throughout negotiating process elements throughout negotiating process

CONSIDERATIONS FOR THE HONG CONSIDERATIONS FOR THE HONG KONG MINISTERIAL CONFERENCE IIIKONG MINISTERIAL CONFERENCE III

Rules negotiations: Emergency Safeguard MechanismRules negotiations: Emergency Safeguard Mechanism

Study ASEAN proposal and strengthen weaknesses to increase Study ASEAN proposal and strengthen weaknesses to increase supportsupport

ensure strong SDT measures, particularly on mode 4 and for ensure strong SDT measures, particularly on mode 4 and for LDCsLDCs

voice support for having in place an ESM as a condition to voice support for having in place an ESM as a condition to offering commitmentsoffering commitments

CONSIDERATIONS FOR THE HONG CONSIDERATIONS FOR THE HONG KONG MINISTERIAL CONFERENCE IVKONG MINISTERIAL CONFERENCE IV

Rules negotiations: SubsidiesRules negotiations: Subsidies

declare importance of disciplining subsidies and the need declare importance of disciplining subsidies and the need to conclude negotiations before market accessto conclude negotiations before market access

develop plan of action to move forward on negotiations develop plan of action to move forward on negotiations and outline terms and conditions based on defensive and and outline terms and conditions based on defensive and offensive interestsoffensive interests

CONSIDERATIONS FOR THE HONG CONSIDERATIONS FOR THE HONG KONG MINISTERIAL CONFERENCE VKONG MINISTERIAL CONFERENCE V

Rules negotiations: Government ProcurementRules negotiations: Government Procurement

resist market access in government procurement in resist market access in government procurement in servicesservices

CONSIDERATIONS FOR THE HONG CONSIDERATIONS FOR THE HONG KONG MINISTERIAL CONFERENCE VIKONG MINISTERIAL CONFERENCE VI

Other IssuesOther Issues

comprehensive assessment as a condition on market access comprehensive assessment as a condition on market access negotiations negotiations

push for reviewing progress in negotiationspush for reviewing progress in negotiations

implement LDC Modalities particularly action oriented implement LDC Modalities particularly action oriented paragraphs 6 through 9 paragraphs 6 through 9

communicate ongoing and systemic supply and negotiating communicate ongoing and systemic supply and negotiating capacity constraints capacity constraints

CONCLUSIONCONCLUSION

Does GATS binding liberalisation help meet national development Does GATS binding liberalisation help meet national development goals and objectives?goals and objectives?

Trade offs with other areas of negotiations?Trade offs with other areas of negotiations?

Common positions and strength in numbersCommon positions and strength in numbers

THANK YOUTHANK YOU& &

QUESTIONSQUESTIONS