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GLOBAL SERVICES NETWORK NEWSLETTER APRIL 2008

April 14, 2008 Wall St. Journal Op-Ed on Doha Services Negotiation In an article appearing in the April 11 edition of the Wall Street Journal Asia, US trade Representative Susan Schwab and Australian Trade Minister Simon Crean emphasize that they will not support a Doha package unless it includes an "ambitious outcome on services that delivers commercially meaningful results." In addition, they call for new services offers that bind existing market access and provide for additional liberalization.   The article is copied below.

===================   OP-ED: Doha Dealbreaker (Wall Street Journal Asia)
April 11, 2008; By Australian Minister SIMON CREAN and Ambassador SUSAN SCHWAB In today’s world, having access to world-class service providers can be the difference between economic growth and stagnation. Open markets promote innovation and entrepreneurship, generate lower costs and higher-quality goods, increase the pace of technology diffusion and attract more foreign investment.

Reaching a strong outcome in services in the World Trade Organization’s Doha Round is so important that the United States and Australia have decided to make our position clear: Like many other WTO members, we will not support a Doha package unless it includes an ambitious outcome on services that delivers commercially meaningful results.  

Communication, finance, energy, transportation and distribution services are essential inputs in the production of goods and services and are "force multipliers" that expand economic opportunities and increase productivity. An efficient services sector is crucial to the development of vibrant, modern and resilient economies.   In fact, several developing countries have autonomously liberalized certain sectors as part of their development strategy, recognizing that high services barriers only constrain their economic potential.

For example, telecommunication markets have been opened up throughout the developing world, and everywhere it has resulted in greater telephone access and lower charges, with profound positive effects on rural farmers, small businesses and industrial exporters alike. This is why services are such an important part of most countries’ development strategies and why it needs to be part of Doha’s agenda.

The Doha negotiations give both developed and developing countries a once-in-a-generation opportunity to lock in services liberalization and harness its potential for future growth.   Reforms to trade in agriculture and industrial products have dominated headlines on the Doha Round of world trade talks, and opening up agricultural and manufacturing markets will be extremely valuable. But liberalizing global services markets can provide even greater potential economic benefits.

Services contribute more to the world economy than agriculture and manufacturing combined, and are the fastest growing component of world economic growth, according to the World Bank. Comprehensive services sector liberalization – through open markets and nondiscriminatory treatment of service suppliers – would permanently boost the global economy by more than $1 trillion than would exist otherwise. This is a greater boost than the full removal of subsidies and tariffs around the world on agricultural and goods markets.   We, the Australian and American trade representatives, believe the Doha Round of trade negotiations represents our best opportunity to deliver global and sustainable economic growth.

This is important because over the past five years world trade has grown twice as fast as world output. In the WTO services negotiations, we acknowledge that some countries are reluctant to offer more on services, especially in the absence of greater clarity in other parts of the Doha package. However, it is our view — and indeed a broader view – that the round will only deliver in terms of global growth and development if all areas of market access — agriculture, industrial products and services – are negotiated satisfactorily.  

In recent weeks, we have welcomed the first draft of a services text that must – in its final form – provide the necessary multilateral political guidance for an ambitious services outcome. We believe this guidance should encourage countries to bind market openness that is currently available to overseas service suppliers wherever possible, and then to build on this platform by offering new market access in areas where significant impediments remain.  

Over the next few weeks, Australia, the U.S. and others will pursue these objectives through renewed bilateral and plurilateral negotiations. This process should culminate in meaningful ministerial level engagement that coincides with the conclusion of negotiations on agriculture and industrial products.

At that time, we will be looking for key WTO members to signal their commitment to make significant improvements in their services offers.   It is essential that major decisions on agriculture and industrial goods be accompanied by positive commitments on services.

Only full engagement across all three market access pillars will help us secure a Doha Round agreement worthy of the growth and development goals for which Doha was started. Mr. Crean is Australia’s minister for trade. Ms. Schwab is the U.S. trade representative.