1. Status of GATS Negotiations
David Hartridge
Hanoi, Vietnam
August 5, 2003

2. Timelines for GATS Negotiations
Started in January 2000, as agreed in Uruguay Round. Incorporated in Doha Round, December 2001.
Negotiating guidelines and procedures agreed in March 2001.
Target for submission of requests 30 June 2002; for offers 31 March 2003.
Deadline for conclusion 1 January 2005.

3. Status of GATS Negotiations
Progressing smoothly and without controversy in Geneva.
But attacked in public by NGOs as threat to public services, development and the right to regulate.
Key sector in Doha Round, giving leverage to developing countries.
But threatened by difficulties in other sectors, especially agriculture.

4. The Economic Stakes In most developing countries services
account for at least 50% of total output: in
US 80%
Developing countries’ exports of services
are growing much faster than developed
9% against 5% annually
World Bank estimates that services
liberalization by developing countries will
increase their income by $6 trillion by 2015

5. Negotiating Objectives
The basic objective is to improve market access by extending Members’ GATS commitments to additional services and removing current limitations on access.
Secondary objective is to complete the GATS framework with disciplines on subsidies, safeguards, government procurement and domestic regulation.

6. Negotiating Guidelines
Emphasis on flexibility for developing countries
All sectors and modes of supply covered
Existing commitments the starting point
Request/offer the main but not the only method of negotiation
No change in bottom-up scheduling principle or GATS structure

7. Request and Offer Process
30 have made initial offers. Some are being held back for tactical reasons (agriculture). 8 more are promised before Cancun.
About 30 countries (EU = one) have submitted requests. Almost all WTO Members have received them.
The number and quality of offers will be improved in intensive « clusters » of bilateral meetings in Geneva.
Developing countries have made 15 offers so far.

8. Requests by Developed Countries
Most requests confidential, but those of EU leaked. All-inclusive, need to be prioritized. EU also described requests it received from 30 countries.
US requests are public, also very comprehensive. They often request Additional Commitments, e.g. on transparency in financial services.
About 17 developing countries have made requests, stressing mode 4 labor mobility.

9. Negotiations on GATS Rules
Safeguards: No agreement after 7 years; developing country demandeurs might raise concerns at Cancun
Subsidies: No movement; few demandeurs
Government Procurement: No movement; few demandeurs
Domestic Regulation: More serious: Japan Annex proposal and EC proposal

10. The Doha Development Agenda
The Doha Agenda has four major components:
Market access: agriculture, services, industrial products
Rule-making: dumping, subsidies, dispute settlement, environment, intellectual property and regional trade agreements
New (Singapore) issues: investment, competition, trade facilitation, transparency in government procurement
Development: special and differential treatment

11. Dependence on Agriculture
There will be no agreement on services or
any other issue in the Doha Round without
progress in agriculture. For many countries
this is the highest priority in the Round.
The outcome at Cancun will depend first on
agreement on modalities for agricultural
liberalization. Without this it will be a failure.

12. The Big Package
The EU, like Japan, Switzerland and Korea must make politically difficult concessions on agriculture.
They therefore promote a big package, including investment and competition, to secure offsetting benefits.
But agreement at Cancun to start negotiations on these, and on other Singapore issues unless they are delinked, will be very difficult.

13. Status of Cancun Preparations
Deadlines missed on modalities, dispute settlement and development issues.
First draft Cancun Ministerial text released 18 July, second draft expected by 24 August.
No agreement yet on modalities for agriculture or industrial products, and strong opposition to investment.
Development issues on track.

14. Deadline: 1 January 2005
Assuming success at Cancun, is completion by this deadline feasible?
On market access and rule-making it may be, but on investment and competition?
What does this imply for the single undertaking?

15. Status of GATS Negotiations
David Hartridge
Hanoi, Vietnam
August 5, 2003