Navigation path

Left navigation

Additional tools

Other available languages: FR DE DA ES NL SV PT FI

IP/02/1001

Brussels, 4 July 2002

EU tables market access requests to inject momentum into WTO services negotiations

The European Union today submitted the EU's initial requests to other WTO Members for improved market access on services. In tabling its requests, the EU seeks to improve access for its services exporters whilst preserving the rights of all WTO members' rights to regulate their markets in order to achieve legitimate policy objectives. The EU's requests have been formulated in such a way as to ensure the liberalisation of trade in services contributes to sustainable development and encourages greater participation by developing countries in the benefits of greater market opening. Marking the occasion, EU Trade Commissioner Pascal Lamy said: "Services are a driving force for the EU economy and have great export potential which we legitimately seek to tap. Trade in services is essential to sustain growth and employment in the EU. It is also a key element of the Doha Development Agenda in fulfilling the objective of making trade work to pull developing countries out of poverty. Liberalising services will benefit all WTO members, whether developed, developing or least developed." The submission of the requests on services is expected to give new impetus to the overall Doha Development Agenda (DDA) negotiations.

The negotiations on services to update and improve the existing General Agreement on Trade in Services (GATS), begun in 2000, gained momentum at the WTO Ministerial Conference at Doha in November last year with the launch of the Doha Development Agenda negotiations. The final declaration of this conference called on WTO members to submit requests for specific commitments from other members by 30 June 2002 and to present initial offers to other members by 31 March 2003.

In tabling its requests, the EU seeks a reduction in restrictions and expansion of market access opportunities. Broadly, the requests cover the following sectors: professional services, other business services, telecommunications, postal and courier services, distribution, construction and related engineering services, financial services, environmental services, tourism, news agency services and energy services.

The requests, which have all been tailored individually, have been forwarded one-by-one to 109 WTO members. No requests are being made of Accession countries, nor of European Economic Area countries.

The EU requests have been drawn up with the following objectives in mind:

  • Elimination of entry barriers such as limitations on the number of service suppliers, limits on foreign ownership or shareholding, restrictions on the type of legal entity, compulsory joint venture or numerical quotas.

  • Securing the right of governments to regulate to achieve public policy objectives. Governments should administer their regulations, insofar as they have an impact on trade in services, in a reasonable, transparent and objective manner. This should ensure a regulatory framework, which can provide legal certainty and confidence to service suppliers, investors, users and consumers.

  • Making liberalisation of trade in services supportive of sustainable development, including in that context the liberalisation of trade in environmental services.

  • Facilitating increased participation of developing countries in world trade in services by duly taking into account national policy objectives and levels of development. GATS is particularly relevant to development, as it provides a key opportunity for all countries to attract stable long term investment and to improve the related infrastructure (transport, telecommunications, financial services), fostering their long-term growth and the competitiveness of their economies as a whole.

In order to prepare for the GATS negotiations the Commission has conducted broad consultations with civil society to ensure a comprehensive and balanced input into the formulation of the Community's position. The areas of concern that have been raised include issues related to the provision of public services in general and health, and education in particular, privatisation, the right to regulate, sustainability and the provision of other services of general interests like water and energy distribution. The EU fully shares the importance citizens in Europe and elsewhere attach to maintaining and developing public services. Therefore, EU does not seek to dismantle public services, nor to privatise state-owned companies. No requests are being made on health services or audiovisual services to any country, and only the US will receive a request on education, limited to higher education services. Requests are being made on environmental services, but these do not touch on the issue of access to (water) resources and in no way undermine or reduce host governments' ability to regulate pricing, availability and affordability of water supplies as they choose. The EU fully recognises that liberalisation of services may have, in certain cases, to be underpinned by an institutional and regulatory framework to ensure competition and to help improve access to such services for the poor.

Separately, Commissioner Lamy responded to requests for greater transparency in the process from a group of non-governmental organisations with an Open Letter in which he explained the limits of what was possible:

'In effect, some sections of civil society are asking me to overturn the method of negotiation that most of our partners find best most of the time. I cannot do that. Those who have been following the WTO debate over the years know that this issue of transparency is viewed by many developing countries not as a guarantee of due process, but as a threat that their positions will be put under even more pressure than is at present the case. So, in working for a progressive opening of the WTO process, we need to work with the grain, not against it.

That will not prevent the Commission from openness at home, but there are limits to what is possible. I will continue to expose all the real policy choices for ex ante debate among all civil society partners. I could not responsibly pretend to be able to allow all comers a voice in the detailed drafting that translates those policy choices into WTO request documents.'

Background

The GATS has established 'rules of the game' that are predictable and the same for all countries. It is based on the principles of transparency and non-discrimination (the 'most-favoured-nation' principle), that is equal treatment for all countries, regardless of their share in world trade or their level of development.

The rapidly expanding services sector is of great importance to developing as well as industrialised countries. It contributes more to economic growth and job creation worldwide than any other sector. In the EU, 67 million people work in the commercial services sector. In addition, more than half of the EC's incoming and outgoing foreign direct investments occurs in services. The EU is the world's largest exporter and importer of services, with 26% of world trade in services (20% of world trade in goods). The services sector is the single most important economic activity in the EU accounting for over two thirds of GDP.

Services are also highly and increasingly important for developing countries. On average, services generate over 50% of developing countries' GDP. A fifth of Africa's exports are services and in India the figure is as much as a third, higher even than the EU.

The full text of the letter and a detailed summary of the requests are available on the DG Trade website.

For a detailed summary of the EU negotiation requests go to:

http://europa.eu.int/comm/trade/services/index_en.htm

A full text of the open letter to NGOs can be found at:

http://europa.eu.int/comm/trade/services/plreply.htm


Side Bar