TCS Daily

Going Around the Protectionists

By Charles Finny - March 1, 2006 12:00 AM

Regular readers of TCS may recall that I was not as negative about the outcome of the Hong Kong WTO Ministerial Meeting as some other commentators on this site. I acknowledged that there was still a huge amount of work to be done to deliver on the mandate agreed at the Doha Ministerial meeting. I saw hope for a good outcome, if countries like New Zealand introduced more ambition in non-agricultural market access and service liberalisation.

One reason for my relative optimism was Annex C to the Hong Kong Ministerial Declaration. This allows for the possibility of plurilateral negotiations on services. This means that rather than needing to achieve consensus with nay-sayers and protectionists, those who actually want to achieve something from the negotiations on services can negotiate together, on sectors of interest.

The results of these negotiations would have to be applied to all WTO members on an MFN basis. But so long as those engaged in the great bulk in world trade in services are on board, who cares about a few free riders enjoying the benefits of other members' liberalization?

I did not expect much detail to come out on which sectors were going to be targeted in these plurilateral negotiations until after Christmas. I have become increasingly worried that now, in March, no details have emerged.

I hosted a lunch last Friday at which I had the Chief Executives of some of New Zealand's largest and most successful service export companies discussing the WTO and bilateral FTA negotiations on services. They did not appear to have been consulted on plurilateral negotiations.

Fearing that I might have missed something, or else that my country's services negotiating team might have failed to consult me, I looked first at the New Zealand Ministry of Foreign Affairs and Trade website. This didn't help much. The latest update on the WTO services negotiations there dates back to January 2005. There is material on New Zealand's revised services offer dated 3 June 2005, but this didn't seem to take any account of a plurilateral negotiation.

I then looked for some Ministerial Statements. New Zealand's new Trade Minister Phil Goff gave a speech last week on the future of New Zealand trade policy talks about the importance of trade in services in WTO and bilateral negotiations. There is no mention of the plurilateral initiative.

I then tried speeches and statements on the website relating to the former Trade Minister Jim Sutton. (Following our election last year, Mr. Sutton will stay on as a Minister of State until April, so he can assist on WTO outcomes slated for completion by then.) The most recent statement from Mr. Sutton on the MFAT website is dated 18 December. The only other more recent statement I could find on the Web was one Mr. Sutton made just before Christmas where he criticised me, suggesting I must be living on another planet. (Apparently, Mr. Sutton had objected to my suggestion that not enough had been achieved in Hong Kong to conclude the Round.)

I then tried the WTO website. I couldn't find anything on plurilateral negotiation on the services section of the website, beyond that in the text of the Hong Kong Ministerial Declaration, but I did find the news that I was looking for, buried deep in the transcript of a media conference given by WTO Director-General Pascal Lamy, who kindly tore himself away from coverage of the Winter Olympics on 21 February to allow many questions to be answered. This interview contains the following exchange:

Question: In services, do you think the launch of the plurilateral negotiations can really fast-track the talks? How many requests have you received under the plurilateral negotiations so far?

Answer: I am hopeful. It makes sense for countries to look at their particular common interest, as long as they don't close out others. The launch of the plurilaterals is imminent.

Reassured that the negotiations are only imminent, but not yet underway, I await contact with New Zealand's negotiating team on which sectors they will be pursuing. But let me make a few suggestions about sectors where liberalization will make a difference globally and to developing countries in particular:

  • Let us build upon the success of the WTO's most successful plurilateral, the Information Technology Agreement, including all services ancillary to the IT sector: systems that support electronic commerce, call centers and outsourcing of software development.

  • Let's liberalise environmental services, which are already part of the Doha mandate; and professional services, such as geotechnical advice, civil engineering, architecture and design, some of which cross-over with environmental services.

  • The movie, television, advertising, music, and entertainment sectors are increasingly global. Both the production and post production ends can be liberalised. Where possible, let's remove Government regulation on local content, and quotas on numbers of foreign programs that can be played on TV, radio and over the internet.

  • Technology is making it easier to deliver world class air traffic and meteorological services globally.

  • Finally, the education and tourism sectors are critical to both developed and developing economies alike.

Liberalization in these sectors would be a powerful result from the Doha negotiations in their own right, but progress in this area would have a positive impact on progress on agriculture and non-agricultural market access also.

The author is Chief Executive, Wellington Regional Chamber of Commerce.


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