International Trade Reporter / Volume 17 Number 44
The United States and other member countries of the World Trade Organization expect to begin talks early next year on developing new rules to govern global trade in services, but U.S. industry sources said Nov. 1 that the plan is now being opposed by India and Hong Kong--two highly influential members of the organization.
Executives representing U.S. telecommunications and other services companies said that they were told during a recent visit to WTO headquarters in Geneva, Switzerland, that India and Hong Kong were reconsidering their support for an earlier WTO-sponsored plan to launch a new round of services negotiations next March. The executives said that India and Hong Kong were apparently withholding their support until they obtain assurances from the United States and others that they receive something substantial in return for opening their services markets to foreign firms.
'No Going Forward' Without Assurances
Joanna McIntosh, vice president for international affairs at AT&T Corp., said that India and Hong Kong were arguing, in particular, that there can be "no going forward" with the services negotiations until countries agree to launch a new round of global WTO trade talks, where concessions in one area could be traded off against concessions in another.
McIntosh, a former U.S. trade negotiator, said that India and Hong Kong appear to be the only WTO members having second thoughts about the March 2001 launch date for the services talks. But she said that, given their influence at the WTO, "that view could become very popular in Geneva."
The AT&T executive was part of a 10-member U.S. industry group that met with WTO and other trade officials, including WTO Director-General Mike Moore, in Geneva Oct. 11-13.
Another member of the group--Peter Ehrenhaft, an attorney representing the American Bar Association--agreed that other WTO member countries, including India and Hong Kong, will want to know what the United States will be able to offer in return for greater access to their markets before agreeing to proceed with the services talks, particularly since the United States is the principal demandeur in the negotiations.
"That will be an important challenge," Ehrenhaft said. Ehrenhaft and McIntosh made their comments at a meeting of the U.S. government's Industry Sector Advisory Committee on Services.
Collins of USTR Responds
Also speaking at the meeting, Peter Collins, deputy assistant U.S. trade representative for services and investment, said that, despite industry concerns, he was confident that the March 2001 schedule would be met. "I think if we take this step-by-step," Collins said, "we can bite off the next chunk in March."
Collins said that, meanwhile, the WTO will be working this fall to agree on a set of negotiating guidelines and procedures that will be used in the services talks when they begin next year. He said that, in addition to the United States, Hong Kong and a group representing most African countries had submitted proposals, and that the European Union; India; and the Southern Common Market customs union of Argentina, Brazil, Paraguay, and Uruguay (MERCOSUR) will submit their ideas shortly.
Services Subsidies
Collins said that over the next few months the WTO will also be looking into how it will handle the issue of trade-distorting subsidies in the services sector, including whether they exist. "I'm not sure there are any," he said. He said that, nevertheless, the issue has risen to the WTO agenda largely because Hong Kong and Argentina have shown an interest in the discussing the subject, even though, according to Collins, neither country seems to have a clear idea of what it wants. Collins said that the WTO, therefore, has sent out a questionnaire to member countries seeking to assess their interest in the issue.
The Commerce Department has said that the services sector currently represents the largest component of the U.S. economy, and that U.S. services exports have nearly doubled over the past decade, from $136 billion in 1990 to $259 billion last year. Major markets for U.S. services include Europe ($86 billion in exports last year), Japan ($53 billion), and Canada ($21 billion).
By Gary G. Yerkey:
