U.S. Eyes WTO Services Pacts Amid Doha Stall

By | January 25, 2012

The United States is making a push for a group of countries within the World Trade Organization to start talks to liberalize trade in services, even if big developing countries like China, India and Brazil don’t want to join, U.S. government and industry officials said on Tuesday.

“It would be an overarching services trade agreement among a number of countries that are willing to enter the agreement, not those that won’t,” Robert Vastine, president of the Coalition of Services Industries, told reporters.

“So if the Chinese, the Brazilians, the Indians don’t want to do it, don’t want to make progress, we’ll go ahead.”

Such a pact could include sectors such as banking, insurance, telecommunications, logistics, express delivery, energy services, audiovisual and other services sectors where the United States has big export potential.

U.S. Trade Representative Ron Kirk is attending the World Economic Forum this week in Davos, Switzerland, where he is expected to promote the idea of a “pluri-lateral” – or multi-country – services trade pact.

It comes after countries have tried unsuccessfully for 10 years to conclude the Doha round of world trade talks, which was supposed to open up new markets in agriculture, manufacturing and services as well as make other reforms to help the world’s poorest countries prosper through trade.

In those talks, Washington argued advanced developing countries like China, India and Brazil needed to make much better offers to open their markets in exchange for the cuts in farm subsidies and agricultural and manufacturing tariffs that the United States was being asked to make.

Trade ministers from the 153 members of the WTO acknowledged last month in Geneva the Doha negotiations were at an impasse. They did not give up on the round, but agreed to “more fully explore different negotiating approaches.”

Last week, Australia hosted a meeting of 16 WTO members, including the 27-nation European Union, where U.S. Ambassador to the WTO Michael Punke urged them to consider negotiating a pluri-lateral services agreement.

In Washington on Tuesday, Vastine said the United States should push for a services pact on its own merit, rather than as part of some “grand bargain” to save the Doha round.

But a U.S. trade official, speaking on condition of anonymity, did not preclude either option.

“Our own vision of a services pluri-lateral is that it should be a stepping stone, rather than an obstacle, to multilateral liberalization,” the official told Reuters.

The BRICS group — which includes Brazil, Russia, India, China and South Africa — frowned on the idea of pluri-lateral negotiations at the December WTO ministerial meeting.

However, WTO rules do not require agreement from all members to launch services negotiations, even though there is such a requirement for agriculture and manufacturing.

None of the BRICS were at last week’s brainstorming session on services, which also included Canada, Chile, Colombia, Hong Kong, Japan, Mexico, New Zealand, Norway, Pakistan, Singapore, South Korea, Switzerland and Taiwan.

Although the EU is not yet fully on board with the idea, the U.S. services sector is hopeful they will join the United States and others in launching negotiations.

(Reporting By Doug Palmer; Editing by Cynthia Osterman)

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