ESF: crisis in WTO needed; EU thinking on benchmarks

the EU Commission held several 'civil society dialogue sessions' this week. This Friday afternoon DG Trade official Anders Jessen entertained about 17 people for a session on the Gats.

Following 'civil society organisdations' were present: FTA (traders association); ECSA (shipowners); Eurocommerce (traders association); ESF (European Services Forum); ARD (German television); ICFTU, FGTB (Belgian ICFTU affiliate);Wide, Solidar, ICDA, DHK, FOEE, 11.11.11 (ngos)

Hightlights of the session:

• Anders Jessen explains what the EC thinks of benchmarks
• 'Pascal' (the Commission always adresses him with his first name) of ESF gets excited and says there should be a crisis in the WTO

In his introduction Anders Jessen provided the following information:

• not very much is happening in Gats, we are now very far behind the original deadlines
• the offers on the table represent 90% of trade, Indonesia and Egypt have tabled offers. We still need offers from countries like South-Africa and the Philippines. There is a contradiction between the claims of these countries that they are important and not making an offer which we tell them at every occasion (note from MM: when they want to take part in meetings??)
• in January the EU tabled revised request to be more precise on what we want
• in May we hope to see revised or initial offers
• it is too early to say whether the will be a GATS crisis, offers haven't arrived in Geneva yet
• on the EU revised offer: was a challenge, because we olready had one of the best offers, but we want to be seen as leader so we made some improvements still
• biggest challenge in the EU revised offer was the bringing together of the 10 new EU countries with the EU15. Six of the new countries hadn't even tabled offers in 2003; we had advised them not to do so (as they we going to join us soon anyway); but the EU revised offer therefore means that there are already 6 more offers; the revised ofer brings the EU10 to the level of the EU15 in most sectors were we have strong offensive interests: transport, computer related services, postal services; in energy we didn't offer anything in 2003 because of lack of process in the classification discussion, no there is a bit more clarity; we now added services incidental to mining; no energy distribution yet; just enough to show we are interestedIn environmental services we have been offensive, we are putting elements in our offer even if nobody requested this, but we did; so we added advisory services in mode1; we did not receive any water requests, so we did not offer anything ! (not of MM: but they did requested waterliberalisation of more than 70 countries!!)
• in mode 4 there is a transitional period for some EU10 who did not even completely open up there labour market to the EU15 yet.
• the mode 4 offer for CSS is now also expanded to legal services(see earlier mails of MM about the EU offer, because Jessen only told bits and pieces here)
• the EU revised or improved offer will be made public when it is send to Geneva.

In a second part Jessen talked about the rules negotiations:

• again he said that there was not much movement. The EU was pushing mostly on government procurement and domestic regulation. Some WTO members are saying that no that the Singapore Issues are of the table govvernment procurement is too, but this was in Gats before the Singapore issues were even called Singapore Issues, so this must be negotiatied, but it is an uphil struggle
• on the emergency sageguard measures, ESM: it was quiet on this issue for some time, the EU was surpriesd to see that the negotiating chair wanted to organise a brainstorming session on it; the proponent haven't answered to our questios yet.
• on subsidies the EU is neutral: not for, not against; but this is even less strongly pushed by its proponents
• on domestic regulation: may here ther could be something by Hong Kong; the US has a low level of ambition, only transparency, and maybe only for certain sectors. The EU has a more broad ambition, cross sectoral. Although this is sensitive for all countries, ther is some movement on domestic regulation.

In a third part Jessen mentioned the EU25 consolidation and the EU's request to the WTO to withdraw some commitments made by the new EU countries in 1994, because they do not align with the origianl EU countries. 18 counties are negotiating with the EU on compensations. This is still in its clarifications stage. The EU maintains that there is no negative impact of the changes that the EU want to make. The deadline has been moved to 27or 28 February 2006.

The EU requesed that the minutes of the discussin that were held about this issue were taken out of the GATS Council minutes because normally such documents relaed to such negotiations remain restricted until they are finished.

In answer to questions from the floor, Jessen gave additional information:

• BENCHMARKS: is a sort of formula approach, we did not have that in Gats yet, but because of the state of the negotiations, people will start to ask whether this methode is appropriate. The current request/offer method was pushed by developing countries (DCs); we did not understand why, because bilaterals are not in their interest. We began an internal reflection, which is very much in early stages; they will only be necessary if the offers are still of poor quality. Some might also wait until bechmarks are established before they want to table anything, to table only the minimum. Benchmarks are incredibly difficult. Our measuring stick was what we have requested ourselves; most would do the same. This does not mean that when comes June or July that we don't need anything: a new deadline again? A lot will say we need something (else). The request and offer method will not disspear, but will be supplemented with something else. the ministers like to put objectives. Benchmarks, are not to say there will not be any SDT. The thinking on benchmarks is still in early stage, but will not go away, in particularly not when there is no movement in the offers in June/July.
• how will the EU push countries to make offers? Mandelson talks to countries, is politically profiling services, has written to countries; The EU is paybing in other sectors, we want something in return in services
• on Mode4: the Commission is still working on numerical sealings for Mode4. Lamy wanted to get rid of needs test and the EU members states wanted some kind of quota in stead; so we are working out numerical sealings;
• on the US offer: there will be a US offer, but probably without mode 4. But the US administration has not spent much capital yet on talking to the Congress. Maybe Portman can use his political capital as new USTR to move on this. We will urge him to.
• on helping poor countries to make offers: we offer TA and work closely with DG Development; we work through UN institutions; we help to get DC services industry organised; we tabled precise revised requests; but do not understand sometimes when DCs say that they do not have the capacity to table offe(rs, because many of ther services are already open; so this means they do not want to bind them; but this leaves uncertainty to the industry..

Comment by Eurocommerce (traders association): we think there is too little moving on distribution services; we must think about trade offs, f.i. in NAMA; how can we help DCs to make more offers; we thank the Commsision for her cooperation (??)

Comment (or rather demands) of 'Pascal' of ESF (the European Services Forum, the coalition of the services industry)

• on the number of offers: we still miss South Africa, Philippines, Pakistan, Morocco and Venezuela. We do not insist on having offers from other countries. But these we need. South Africa is the 12th trading partner to the EU in services, BEFORE Brazil, India, Mexico and Korea! It is unacceptable that SA does not offer! (note from MM: in an earlier session 'Pascal' said that the ESF had been approaching these 5 countries directly, but admitted that it was not easy to do).
• on quality of the offers: it seems unacceptable that offers do not even contain the existing practices! And in the mean time countries sign negative services lists in bilaterals with the US! We want to have trade offs between services, NAMA and Agriculture. If we do not get services, they will not get Agriculture. Countries say the GATS is not specific on what to offer, but they are playing with the system; they praised GATS for its flexibility, but they are not doing anything. We do not want to go into benchmarking if counties are waiting for them before making offers; benchmarks must be to the benefit of the negotiations.
• the ESF is also helping to build services coalitions in other countries, like in Brazil or in India (where Nascom signs statements with us), or in the Caribbean (Barbados, St. Lucia), or Chili.
• We hope there wil be good offers by the end of May, if not: we will have a crisis, not in services but we will have one in the WTO. Mandelson said in Paris that the priorities up to Hong Kong are agriculture, agriculture, Nama and services, we want services to be on top, not fourth. We should stop things (not tabling offers), there must be trade offs.
• we want something in the negotiations, if not through the disciplines, then directly through the request/offer process
• what we want on domestic regulation is in our paper (see www.esf.be). The request/offer process is about removing exsiting barriers, the rules part is to prevent new barriers from being raised
• we were also surprised about the brainstorming on the ESM, only the Philippines and Indonesia are still interested, Thailand not anymore; the only mode in which it would work is in mode4, where it could work against the DCs (to which Jessen replied: some DCs had second thoughts from the outset. India and Pakistan are completely silent on it, have doubts but keep quiet out of DC-solidarity).