WTO services draft lacks direction

26 May 2008


Mediators at the World Trade Organisation (WTO) have issued draft new proposals for opening up services such as telecoms and banking as part of a global trade deal.

But the new text, prepared by Mexico's WTO ambassador, Fernando de Mateo Venturini, who chairs the services talks, noted big differences between developed and developing countries on the way to proceed.

The new text which is to replace the earlier draft prepared in February, did not set dates for revised offers or final commitments in the services negotiations.

''Substantial efforts were needed to reach a successful conclusion of the negotiations," Mateo said in the report.

The document, with a draft annex, has been prepared as a formal negotiating text as three WTO members - Bolivia, Cuba and Venezuela - argued against any formal services draft.

Along with the revised proposals for agriculture and industrial goods, the new document should serve as a possible starting point for ministers to reach a deal in the Doha Round of trade negotiations, now in its seventh year.

Services account for over 70 per cent of most developed economies and 50 per cent or more of many developing ones. But they make up only 19 per cent of world trade.

While negotiations on agriculture and industrial goods focus on cutting tariffs and subsidies, talks in services are about changing domestic regulations to let in foreign competitors.

The revised services draft, however, does not list specific proposals for opening different sectors, but instead lays out the framework for an agreement. And there is still disagreement on some fundamentals.

Only about 30 countries are taking part actively in the services talks, both in bilateral pairs and bigger groups, but any liberalisation they agree to is open to all 152 WTO members.

The US, the EU and other rich countries are calling on major developing nations such as Brazil, China and India to open up banking and other professional services.

In return, developing countries want rich nations to let in more temporary workers in areas from construction and health - a demand that has run up against national security concerns and anti-immigration sentiment in developed states.

The larger issue is how much access the agricultural products of the developing world would have to the western markets and in return how much access western companies would have to the goods and services markets in the developing world.

A WTO ministerial meeting at the end of June would have to have unanimous agreement among all the member states for a trade deal.

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