21 Good Friends Move Forward in Plurilateral Services Accord at WTO

Talks regarding a planned services plurilateral agreement have continued advancing, sources have confirmed to Bridges. Participants of the 21 member group met in Geneva last week to address a series of technical issues relating to the planned trade pact, including ways to schedule commitments, a date for discussing possible legal texts for the deal, and a work plan for 2013.

Following last week’s meetings - which brought together capital-based experts for two days of discussions, followed by a third day of ambassador-level meetings - members of the WTO member subgroup are now aiming to start discussing the possible legal text of a deal by March, sources said.

During last week’s meetings, the group - known as the “Real Good Friends” (RGF) of Services - also decided to hold additional meetings in April/May, June, September/ October, and November.

Sources: Growing support for hybrid approach

RGF members have shown growing signs of support toward adopting a proposed “hybrid approach” of the way commitments are currently scheduled in the WTO’s General Agreement on Trade in Services (GATS), sources say.

The proposed hybrid approach would involve scheduling market access on a positive list basis, and national treatment on a negative list basis. With a positive list, members only liberalise those areas that they agree to; under a negative list, members liberalise all areas except those explicitly excluded.

There are still details of the planned hybrid approach that need to be worked out, however. “We’ll have to try out the format, look at its weaknesses, and deal with that,” one source said.

Ratchet, standstill clauses

Other topics discussed last week included whether to include “standstill” and “ratchet-in” clauses in such a deal.

Under a standstill clause, members would agree not to create new obstacles to services trade. With a ratchet-in clause, in cases where one participating member improves services market access on its own, that newly liberalised access would then be accorded to other parties to the deal, and become permanent.

Members are currently looking at having standstill and ratchet-in apply generally to national treatment obligations, but could handle market access on more of an ad hoc basis, sources explained.

The 21 Real Good Friends

The 21 WTO members currently in the RGF group are Australia, Canada, Colombia, Costa Rica, the EU, Hong Kong, Iceland, Israel, Japan, Mexico, New Zealand, Chile, Norway, Peru, South Korea, Switzerland, Taiwan, Turkey, Pakistan, Peru, and the US.

Members hoping for “quick” process

Delegates speaking to Bridges stressed that, while members wish to conclude the negotiations quickly, there is no set timeframe for the talks. “We’ll have intense meetings all year, and there is a tacit agreement that the process should move fast, and that we should have a deal quickly, with some members suggesting we should have some positive signs by year’s end over our negotiations. However, there isn’t a predetermined date,” one developing country official said.

Another noted that - while it is still too early to say when the negotiations might be completed - one hope is that a body of members could provide strong offers by the end of April or early May. “That would certainly put the negotiations on a very good footing,” the delegate said, cautioning that some areas, such as new and enhanced rules involving scheduling commitments, could take more time.

Multilateralising?

Whether and how the benefits of the plurilateral services pact could be extended to WTO members that are not party to the deal is also still under discussion, sources say.

“We’ve talked about it, but we haven’t taken any decisions on multilateralisation, as we still have to see what the level of ambition will be among us,” one developing country official familiar with the talks said. “But yes, one of the ideas on which this is based on is eventually mutilateralising the deal under certain conditions.”

As for how such a deal might be multilateralised, another delegate suggested, would be to have a “critical mass” arrangement where, once the membership of the pact reaches a certain level, the benefits then become extended to all WTO members. If not, another option could be to notify the pact under Article V of the GATS as an FTA, the source explained.

Ultimately, what form this will take shape will depend on the membership of the deal, as current parties are seeking “as broad as possible participation in this agreement,” while making sure that new members share the level of ambition of existing ones.

Reception

The preparations for negotiating a plurilateral services pact come as services negotiations in the WTO’s Doha Round of trade talks remain blocked. In that context, some WTO members not participating in the RGF talks have voiced concerns over whether a plurilateral approach might end up undermining the Doha Round efforts, and the multilateral trading system as a whole. Emerging economies - such as Brazil, China, and India - have been among those to table such questions.