SERVICES NEGOTIATIONS Said EL HACHIMI World Trade Organization

The basics What interest in trade in services; WTO GATS The negotiations What is it all about? The gains for developing countries Should we care? SERVICES NEGOTIATIONS

The basics What interest in trade in services; WTO GATS SERVICES NEGOTIATIONS

THE IMPORTANCE OF TRADE IN SERVICES IN THE WORLD ECONOMY Services is the dominant economic activity in virtually all countries of the world, regardless of their level of development. Services tend to be an important source of employment Given their infrastructural role, services such as telecommunications, financial services (including banking and insurance), business services, construction and transport are crucial in shaping overall economic performance THE BASICS

THE BASICS THE BASICS : WTO General Agreement on Trade in Services –GATS- Negotiated during the Uruguay round The first multilateral agreement on services

GATS : Principles Main objective: progressive liberalization through successive rounds of negotiations as a means of promoting growth and development. Applies to all services but there are exceptions Most-favoured nation treatment Commitments, including National Treatment Special treatment for developing countries Keeping control of national regulations

GATS : Four modes of supply Cross-border trade –Mode 1- Only the service crosses the border Consumption abroad –Mode 2- Consumer travels to the service supplier’s territory Commercial presence –Mode 3- Service supplier establishes a presence (FDI) Presence of natural persons–Mode 4- Service supplier travels to the consumer’s territory to supply the service

Current sector focus of commitments

The negotiations What is it all about? SERVICES NEGOTIATIONS

Key dates in services negotiations 1 January 1995: GATS enters into force February 1997: Agreement on basic telecommunications December 1997: Agreement on financial services 1 January 2000: The new negotiations begin January 2000: submission proposals begins July 2002: exchange of initial requests begins March 2003: submission of initial offers begins The July framework: new impetus The Hong Kong Ministerial

What is the new negotiation all about? Negotiations started before the Doha Ministerial- the built in agenda- Objectives and principles Scope of the negotiations Modalities and procedures Special treatment for the LDC’s

What has been happening ? Doha and Cancun Ministerial Conferences The July framework highlighted the need for more offers Hong Kong refocus in terms of objectives, approaches and timelines –Annex C-

State of play of the negotiations Initial requests – little information available Initial and revised offers : since 2003 > 70 and 30 revised The quality of the offers is similar to the Uruguay Round sectoral coverage

Number of Offers per Sector

Numberof Offers per Sector -Continued- Number of Offers per Sector -Continued-

Main Challenges Will new methodologies such as plurilaterals work? Different stages in Members engagement in the services negotiations The rules clusters of the GATS Credit for Autonomous liberalization Overall balance with Agricultural and NAMA negotiations

The gains for developing countries Should we care? SERVICES NEGOTIATIONS

In total, more than 30 developing country Members have voiced interest in at least one sector or mode of supply under negotiation. Relevant sectors include professional services, computer and related services, telecommunication services, audiovisual services, construction and related engineering services, distribution services, energy services, environmental services, financial services; tourism services and transport services (including logistics). Movements of natural persons (under Mode 4) and, more recently, the cross-border supply of services (under Modes 1 and 2), have also attracted attention. Specific Issues of Interest to Developing Countries

In general, these gains have been found to dwarf the benefits expected to flow from further trade liberalization in goods. Developing countries stand to gain considerably from liberalization of trade in services, both on the part of their trading partners and in terms of their own policy regimes. Possible Gains for Developing Countries

Read more about the negotiations on the WTO website: Developments in the Services negotiations > trade topics > services > negotiations > developmentstrade topicsservicesnegotiations Proposals for the new negotiations > trade topics > services > negotiations > proposalstrade topicsservicesnegotiations

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