1. One law firm around the world One law firm around the world Status of GATS Negotiations David Hartridge Hanoi, Vietnam August 5, 2003

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

3. Status of GATS Negotiations n Progressing smoothly and without controversy in Geneva.  But attacked in public by NGOs as threat to public services, development and the right to regulate. n 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 n The basic objective is to improve market access by extending Members’ GATS commitments to additional services and removing current limitations on access. n Secondary objective is to complete the GATS framework with disciplines on subsidies, safeguards, government procurement and domestic regulation.

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

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

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

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

10. The Doha Development Agenda n The Doha Agenda has four major components: l Market access: agriculture, services, industrial products l Rule-making: dumping, subsidies, dispute settlement, environment, intellectual property and regional trade agreements l New (Singapore) issues: investment, competition, trade facilitation, transparency in government procurement l 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 n The EU, like Japan, Switzerland and Korea must make politically difficult concessions on agriculture. n They therefore promote a big package, including investment and competition, to secure offsetting benefits. n 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 n Assuming success at Cancun, is completion by this deadline feasible? n On market access and rule-making it may be, but on investment and competition? n What does this imply for the single undertaking?

15. One law firm around the world One law firm around the world Status of GATS Negotiations David Hartridge Hanoi, Vietnam August 5, 2003