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WTO: Services Standoff Heightens Risk of Collapse

Services Standoff Heightens Risk of Collapse

BULLETIN #7 FROM HONG KONG: 16 December 2005
By Dr Jane Kelsey

See also:
BULLETIN #1 - Creating a Climate of Fear in HK
BULLETIN #2 - The Antidote to Fear-Mongering
BULLETIN #3 - Opening skirmishes
BULLETIN #4 - Development Deceits
BULLETIN #5 - Standoff on Services
BULLETIN #6 - Declaration of Solidarity Lays Down the Gauntlet

Outrage has reached new heights over the abuses of power and process that surround talks on trade in services at the 6th WTO ministerial meeting in Hong Kong.

A text designed to placate the demands of the European Union in the negotiations on the General Agreement on Trade in Services (GATS) has been strenuously opposed by a majority WTO members since its first iteration back in October. Their objections have been flicked aside by the Chair of the services negotiations in the weeks preceding the ministerial, and again during the meeting itself.

The EU has declared that it will not move on agriculture unless it gets what it wants on services, especially maritime transport, telecommunications, banking and environment, including water. Developing countries have countered that this is supposed to be a development round of trade negotiations, not a round for developed countries.

Adjustments were made to some of the most extreme elements that enjoyed only luke warm support from the wealthier WTO members, in particular a requirement that all WTO members commit a minimum number of their services to coverage of the free trade rules. This would have intensified the controversy surrounding the GATS, as governments would have found it difficult to avoid making controversial commitments in public and social services, and on short term migration.

However, the text maintained references to plurilateral negotiations with a mandatory element and was seen to erode assurances that governments retained flexibility to determine what services they subject to free trade rules.

When the final text released for discussion in the ministerial meeting contained an Annex that contained the plurilateral proposals, those governments who opposed these measures were furious. They voiced strong objections at the General Council meeting where the final text was discussed, and believed that a covering letter would make it clear to ministers that this text did not reflect the consensus of the WTO members. However, that letter was reduced to a communication between the Director General of the WTO, Pascal Lamy and the Chair of the WTO ministerial meeting John Tsang.

On 15 December six governments – South Africa, Indonesia, Philippines, Venezuela, Kenya and Cuba - presented a letter to Tsang drawing to his attention the fact that Annex C on services ‘is neither an agreed text nor a consensus document. Therefore it is our position that the said Annex cannot be part of the final Ministerial Declaration. We have already expressed our fundamental concerns regarding the said Annex during the sessions of the [Council on Trade in Services negotiating group], the Trade Negotiations Committee and other correspondence with the Director General’.

No notice appeared to be taken of this.

Meanwhile, two other groupings have developed alternative texts. The one from the African, Caribbean and Pacific (ACP) countries, supported by others and renamed the Group of 90, was conveyed to the WTO Secretariat with the intention of it being circulated to members to form part of the negotiating discussions. However, it is believed that either the Secretariat or the Chair of the services negotiations has subverted this by claiming it has not followed the required legal process.

Meanwhile, countries that believe the inclusion of Annex C is a total abuse of process are refusing to recognize and negotiate on any annex. They are concerned that the Group of 90 move requires such recognition and may allow the EU to reopen the text to reinsert its proposals for quantitative targets.

A proposed revised text on services was circulated later on 16th that made some cosmetic revisions to Annex C, but maintained the Annex itself.

It remains to be seen what the Korean Chair of the negotiations will do, but his actions to date lead people to believe that he will simply move with the current Anne. This sets up a direct confrontation in the discussions in the Green Room and the subsequent formal negotiations between at least some of those governments that signed the letter of 15 December and the European Union and other governments that insisted that the previous wording of Annex C was the weakest wording that they will accept.


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