From: Reuters
Published May 26, 2008 08:32 AM

WTO issues new proposals for services sector

By Jonathan Lynn

GENEVA (Reuters) - A World Trade Organisation (WTO) mediator issued new proposals on Monday for opening up services such as telecoms and banking as part of a global trade deal.

But the new text, replacing a previous document isued in February, did not set dates for revised offers or final commitments in the services negotiations.

The document, by Mexico's WTO ambassador, Fernando de Mateo y Venturini, who chairs the services talks, showed big differences remain between developed and developing countries on how to proceed.

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"Members shared the view that substantial efforts were needed to reach a successful conclusion of the negotiations," Mateo said in his report, summarizing progress in the services talks in the WTO's Doha round over the past few months.

Reflecting the difficulties in reaching agreement, Mateo entitled his document a report with a draft annex, rather than a formal negotiating text, as three WTO members -- Bolivia, Cuba and Venezuela -- argue that no formal services text is needed.

Together with revised texts for Doha's core chapters of agriculture and industrial goods, the new document serves as a blueprint for a possible meeting of ministers to reach an outline deal in the round, now in its seventh year.

Besides talks on agriculture and industry, ministers would also hold a "signaling conference" to indicate their intentions in services. That would allow, for example, a country that agrees to a big cut in farm tariffs to take comfort from a probable market opening in telecoms elsewhere.

FRAMEWORK FOR AGREEMENT

Services account for 70 percent or more of most developed economies and 50 percent or more of many developing ones. But they make up only 19 percent of world trade.

Business organizations representing services are keen to prevent long-running rows on opening up agriculture and industrial goods from hampering ambitious plans to lower barriers to services.

While negotiations in farming and manufactured goods focus on cutting tariffs and subsidies, talks in services are about changing domestic regulations to let in foreign competitors.

Mateo's latest report -- to be reviewed by WTO members on June 2 -- does not list specific proposals for opening different sectors, but instead lays out the framework for an agreement.

However, there is still disagreement on some fundamentals.

Developed countries want the opening in services -- the sector of most interest to some rich countries -- to be at least as ambitious as those in agriculture and industrial goods.

They want developing countries to lock in current levels of market opening and agree to further liberalization.

Developing countries do not accept that, and say that any further opening in services must be in areas of interest to them -- including liberalization of the movement of temporary workers, a core demand.

Only about 30 countries are taking part actively in the services talks, both in bilateral pairs and bigger groups, but any liberalization they agree is open to all 152 WTO members.

The United States, European Union and other rich countries are calling on major developing nations such as Brazil, China and India to open up banking and other professional services.

In return, developing countries want rich nations to let in more temporary workers in areas from construction and health -- a demand that has run up against national security concerns and anti-immigration sentiment in developed states.

(Editing by Catherine Evans)

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