1. 1 TECHNICAL ASSISTANCE NEEDED BY LDCs IN SERVICES NEGOTIATIONS Presented by: Teboho Tsekoa New Delhi, June 2006

2. 2 OUTLINE Introduction Supply Capacity Regulatory Framework Trade Barriers

3. 3 INTRODUCTION Trade in services was historically never part of GATT, it was introduced in the UR where only a handful of LDCs participated. LDCs assumed obligations in an area that they were not familiar with when joining WTO. LDCs had to familiarise themselves with the language of GATS and to ensure that existing regulations are translated into GATS language, they also had to submit GATS schedules that reflected the regulatory framework existing in their countries at the time.  There was definitely no capacity in LDCs at the time to do all that, hence most of the LDCs made commitments in very few sectors, even for those LDCs that decided to make commitments in many sectors, a lot of mistakes were made as a result of not understanding the GATS language.

4. 4 Introduction (cont’d)  Over the years, since the formation of the WTO, there have been tremendous efforts by the WTO Secretariat and other International Organisations to provide technical assistance to LDCs through various projects, seminars, courses, workshops etc, in an effort to ensure LDCs’ participation in the services negotiations and their understanding of WTO services rules.  While the efforts are appreciated, it has to be stressed that they have not as yet yielded the expected results.  Lately, with the realisation that trade in services is growing in importance and with its contribution to the economies of LDCs also growing, the LDCs are looking at services with renewed interest and are beginning to attach to services the importance it deserves. The LDCs therefore need technical assistance in order to fully take advantage of opportunities that exist under GATS and what may be the outcome of the Doha Development Round.

5. 5 Supply side capacity LDCs often lack services supply capacity due to lack of information on foreign markets and regulations, limited available human resources, lack of appropriate infrastructure etc. Technical assistance will be needed in this regard to build the supply capacity for services sectors that are sustainable, to –build the supply capacity for services sectors that are sustainable, –strengthen domestic services capacity, efficiency and competitiveness, –build institutional and human capacity, to put up requisite infrastructure and new technologies, –carry out national assessment of trade in services in overall terms and on sect oral basis,

6. 6 Supply side capacity (cont’d) –identify areas of export potential and also identify services that can be profitably committed and those that can be liberalised so that competition can stimulate efficiency and higher quality;  conduct impact assessments of liberalisation. There is also need for special training events targeting trade bodies on how to promote services exports and the implications of GATS ;

7. 7 Regulatory Framework Many services sectors need a good regulatory framework in order to work efficiently and be beneficial for development. Liberalisation of services without an appropriate regulatory framework in place may lead to absurd results.  In practice, very few ministries view their services sectors through trade eyes.  Technical assistance will therefore be needed to:  assist in the undertaking of appropriate regulatory reforms, addressing bureaucracies at the level of Capitals,  translating the services regulatory framework into GATS language,

8. 8 Regulatory Framework (cont’d)  translate the services regulatory framework into GATS language,  To build mechanisms to interact among ministries and the private sector regarding issues relevant to services exports mechanisms to interact among ministries and the private sector regarding issues relevant to services exports;

9. 9 TRADE BARRIERS LDCs face trade barriers in trying to further their interests in trade in services, these barriers include outright prohibitions for market access by foreign firms in developed and developing countries, and they face standards and accreditation, licensing requirements. Many service suppliers from LDCs rely on mode 4 to export services, in which few developed and developing countries are very open.

10. 10 TRADE BARRIERS (cont’d) The problem for LDCs is not just that these barriers exist, but also how to identify them; –what services sectors are of export interest and what are the trade barriers that exist in the export markets that limit services export? –What are elements of discrimination in the domestic market Technical assistance will be needed in this case to enable the LDCs’ negotiators to –identify and negotiate away barriers to international trade in services, –formulate trade barriers into GATS terminology,

11. 11 CONCLUSION In general, there is need for TA to collect and analyse data and do assessments so LDCs can assess costs and benefits of liberalisation. Also, in terms of negotiating assistance, TA on the rules element would be useful given LDCs would have an interest in these but due to capacity constraints cannot participate.

12. 12 Thank you