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Date: Sat, 12 Jun 1999 13:55:38 -0400
From: t byfield <>
Subject: Doug Henwood: Fwd: U.S. bombshell re: WTO

     Date: Fri, 11 Jun 1999 20:25:25 -0400
     From: Doug Henwood <>
     Subject: Fwd: U.S. bombshell re: WTO

     [orig to <>]

[from Sid Shniad]

Date: Wed, 09 Jun 1999
From: Ellen Gould <>
Subject: U.S. bombshell re WTO

The U.S. has just dropped a bombshell into discussions leading up to this
fall's World Trade Organization negotiations in Seattle.

U.S. Trade Representative Charlene Barshefsky announced on June 1
that the U.S. wants a "top-down" approach in negotiations on eliminating
barriers to trade in services - meaning that rather than countries
negotiating on areas they all can agree they want liberalized, all services
will be put on the table at once, including health and education.

That leaves countries who object in the weak position of having to ask
for exemptions for services they want protected, and, as with the MAI,
potentially having to "trade off" these sectors in a final agreement.

This means that all the dangers people identified in the MAI
for Canada's health and education system will reemerge in the WTO talks
on liberalizing services. Canada could not "discriminate" against foreign,
private providers of these services.

There has been no response as yet by the Canadian government to this
aggressive move by the U.S. to massively expand what is up for grabs at the
WTO negotiations.

Contact your local member of parliament to insist that there be an
immediate and public rejection of the U.S. plan to include all services in
the WTO negotiations on the General Agreement on Trade in Services. Canada
must demand that only sectors which countries have agreed to put foward
should be the subject of negotiations - a "bottom-up" approach.

Get in touch with health care and education service providers and alert
them to what is happening.  Their jobs and the public character of the
Canadian system is at stake.  The arguments regarding the threat from the
MAI and this American move at the WTO are essentially the same.

Critiques of this kind regarding the MAI can still be found on the Canadian
Centre  for Policy Alternatives' Web site at:

"Barshefsky said the U.S. will push for new and
improved liberalization commitments in sectors such as finance,
telecommunications, distribution, audiovisual, construction, education,
health, travel and tourism, and professional services."

Date: June 4, 1999 - Inside US Trade -

U.S. Trade Representative Charlene Barshefsky this week said the U.S. is
hoping to significantly broaden commitments to be made in the upcoming
World Trade Organization services negotiations by changing the
negotiating format. In a June 1 speech before the World Services
Congress in Washington, Barshefsky said the U.S. is hoping to move away
from the so-called "request-offer" approach used to negotiate the
Uruguay Round's General Agreement on Trade in Services (GATS).

Under this approach, members were required to apply new GATS rules only
to service sectors they agreed to put forward during those negotiations.

Instead, the U.S. is hoping to create a structure for the services talks
to be launched late this year that more closely resembles the Uruguay
Round's tariff negotiations for goods, she said. These talks applied
generally to all goods except for those that were specifically exempted.

"We need to look at whether we can come up with a more efficient
negotiating structure than the request-offer process of the Uruguay
Round," Barshefsky said.

Specifically, Barshefsky said the concepts used to negotiate tariffs for
goods could be employed in the services talks. In addition to the
request-offer approach, previous tariff negotiations have used the
zero-for-zero approach, in which WTO members agree to eliminate all
tariffs in a sector, and the formula approach, in which members agree to
reduce tariffs by certain amounts depending on their current levels.

For services, these latter two approaches could involve negotiators
agreeing to eliminate all barriers to trade in a certain service sector,
or agreeing to a formula under which these barriers are reduced to
certain negotiated levels.

Barshefsky indicated that applying these other approaches in the
services talks could quicken the pace of services liberalization because
it would allow members to seek liberalization in areas without having to
wait for members to put forward those areas. "We have to decide what
combination of negotiating structures will work best in the services
sector," she said.

With this idea in mind, Barshefsky said the U.S. will push for new and
improved liberalization commitments in sectors such as finance,
telecommunications, distribution, audiovisual, construction, education,
health, travel and tourism, and professional services.

In her prepared remarks, Barshefsky noted that the GATS negotiations
created a set of services rules, but only set "some" precedents for
market access. "Even for WTO members trade [in services] is highly
restricted," she said in her speech. "In most service sectors we see few
specific commitments."

She said that only 14 WTO members have made commitments in the
audiovisual services sector, and no developing countries have made
commitments on the gathering and dissemination of news. Also, fewer than
50 WTO members have made commitments on distribution services, an area
Barshefsky called "critical" to liberalizing trade in goods.

She also noted that while approximately 70 members have signed the WTO
agreements on financial services and telecommunications, that means each
agreement has not been signed by about 60 members.

Barshefsky's comments mirror those made last year by other U.S.
officials, who also said that another way to achieve an expanded
liberalization package is to develop broad regulatory principles that
all services regimes would have to follow. This approach would be in
line with the WTO agreement on basic telecommunications services, which
broke new ground by developing regulatory principles for the sector.

This would also be in line with Article 6 of the GATS, which obliges
members to ensure that their domestic regulations do not impede trade in
services that are listed in members' schedules of commitments. Art. 6
was written generally, and specific regulatory principles still need to
be worked out.

Barshefsky said creating regulatory principles for services is another
U.S. goal in the WTO talks, and that the principles could include the
notion that regulations should be developed in a transparent way and
that they generally should not restrict trade. She said she is
interested in receiving industry proposals on possible principles.

Another U.S. goal for the services talks is to ensure that any agreement
anticipates developments in technology, and that new modes of delivery
do not face unfair barriers, Barshefsky said. This could include making
sure that services such as health care are not discriminated against
because they are delivered electronically.

Before the new trade round is launched at the WTO ministerial meeting in
Seattle scheduled for Nov. 30 to Dec. 3, Barshefsky said the U.S. wants
to strike an agreement guaranteeing transparency in government
procurement, which she said is important to services because governments
are significant purchasers of services. In addition, the U.S. wants to
extend the voluntary commitment made by WTO members in May 1998 not to
place any duties on electronic transmissions made over the Internet.

Finally, she said that work in regional trade arrangements such as the
Free Trade Area of the Americas (FTAA) and the Transatlantic Economic
Partnership (TEP) between the U.S. and European Union will help the U.S.
prepare for the WTO talks. The FTAA is expected to complete a draft
chapter of services commitments in the hemisphere by September, while
under the TEP, the U.S. and EU are working on ways to recognize the
qualifications to which each holds professional services workers.

In other areas, Barshefsky signalled that the U.S. could be open to
including investment in the next round of negotiations, but said that it
would be "out of the question" to simply take up in the WTO the
Multilateral Agreement on Investment (MAI) talks that failed in the
Organization for Economic Cooperation & Development. Instead, Barshefsky
said it is an open question whether a "more modest" package could be
included in the WTO talks.

She said the key factor in deciding this question is whether a proposal
can be put forward that would win enough support from both developed and
developing countries. It would do the sector "no good" if members put
forward a sweeping investment package that fails again, she said.

Barshefsky noted that the MAI talks in the OECD are "effectively dead,"
and that there is unlikely to be any further discussion of investment in
the OECD in the foreseeable future.

In a related development, officials from the U.S., EU, Japan and Canada
were expected to meet yesterday (June 3) to continue work on reach a
common position on the upcoming services talks, sources said. Sources
said last year that Quad members have previously discussed the idea of
agreeing to a structure for the talks that would move away from the
request-offer approach (Inside U.S. Trade, June 19, p. 6).

Inside US Trade - Volume 17, No. 22 -  Inside Washington Publishers