Bridges Weekly Trade News Digest • Volume 5 • Number 41 • 4th December 2001
Services Week Update: Emergency Safeguards & Domestic Regulation
Despite the approaching 15 March 2002 deadline (see BRIDGES Weekly, 29 November 2001) for a decision on whether to establish an emergency safeguard (ESM), talks have stalled within the WTO Working Party on GATS Rules (WPGR) regarding this issue. On another GATS subsidiary body front, Members discussed the applicability of the ‘necessity test’ provision in the context of domestic regulations affecting services trade. As to the Council for Trade in Services (CTS) special negotiating sessions, new proposals have been tabled from, inter alia, Costa Rica and Mercosur, feeding into the discussions on tourism services and their relevance for developing countries.
While Members remain committed to reaching consensus on the question of the establishment of an ESM before mid-March 2002, delegates focused in a 28 November meeting on a communication from the US submitted in October. The paper principally stated that the US would accept proceeding to detailed discussions of an ESM, but only if Members would, in return, make improved commitments in market access negotiations (see BRIDGES Weekly, 9 October 2001). Such a ‘down payment’, as one developing country trade source called it, has polarised stances, thereby preventing Members from reaching the consensus necessary to start work on a draft safeguards instrument.
Besides that, a trade source also attributed the current logjam in the ESM debate to "Members’ tiredness after Doha". Nevertheless, Members expressed their commitment to comply with the March deadline and will be participating in informal consultations throughout early 2002. The next formal meeting of the WPGR will be held in March 2002.
Qualified by one trade source as "more focused on form than substance", Members at the 29 November meeting of the Working Party on Domestic Regulation (WPDR) entered a debate on the scope of the disciplines to be established under GATS Art. VI:4 on domestic regulations.
This provision has raised much concern within civil society in relation to the so-called ‘necessity test’ that it contains, which requires that domestic "measures relating to qualification requirements and procedures, technical standards and licensing requirements do not constitute unnecessary barriers to trade in services."
Discussions at the meeting principally revolved around the issue of whether disciplines on domestic regulation should apply generally or only to Member’s specific commitments. While the wording of the provision is generally understood to encompass all relevant domestic regulations, sources indicated that the overwhelming majority of WTO Members wish to limit its scope only to sectors and modes of supply where Members have undertaken specific commitments. In relation, delegates addressed the procedural question whether a decision on the scope of the disciplines should be sought prior to the agreement on the disciplines themselves, or whether their applicability should be decided at a later stage in order to allow for greater flexibility. According to trade sources, Members are "nowhere close" to reaching an agreement on multilateral rules for domestic regulations. The next meeting of the WPDR is currently scheduled for March 2002.
New proposals in GATS 2000 process
Members on 3 December entered a four-day special (negotiating) session within the CTS. New proposals have been tabled inter alia by Costa Rica on tourism and computer services (S/CSS/W/ 128, 129, available at the WTO website http://www.wto.org) and from Mercosur on tourism (S/CSS/ W/125). In its submission, Costa Rica stresses the importance of computer services for the development of all Members of the WTO, in particular for developing countries, and thus calls for significant commitments in the sector.
Addressing tourism services, both Mercosur and Costa Rica emphasise both the economic and sustainable development elements such as the creation of employment, conservation of natural resources, and development of infrastructure as well as attraction of foreign direct exchange earnings. Costa Rica also points to the problems of anti- competitive practices in the sector and calls for calibrating special session negotiations with the future WTO negotiations on competition policy as provided for by the 14 November Ministerial Decision agreed in Doha, Qatar.
BRIDGES Weekly will report on the outcomes of the complete 3-6 December special session in the next week’s issue.
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