Summary of Australia's Requests in the WTO Trade in Services (GATS) negotiations

The Australian government has lodged in Geneva its initial detailed requests in the GATS negotiations.

The government has not released the requests publicly, as AFTINET and other organisations have asked, but has released a summary of them which says little more than the short papers released last year on the DFAT website.

The summary emphasises that no government is obliged to agree to the requests of another government. We have never claimed that this is the case. The problem is that the negotiations take place behind closed doors, and cover a range of agreements including services, agriculture, and other goods. Governments can come under pressure to trade off services, for example, for gains in agriculture. That is why we are asking for full public disclosure of Australia's requests, and of their responses to requests from other governments which are due on March 30, 2003. This would enable public debate about any proposals which could impact on important areas of public policy like the ability to regulate levels of foreign investment, and the public provision of essential services like health, education, water and postal services.

The summary also claims that governments retain the right to regulate services without mentioning that there are proposals in the negotiations to enable some regulation to be challenged under WTO rules.  The government's summary is reproduced below .

SUMMARY OF AUSTRALIA’S REQUESTS UNDER THE GATS NEGOTIATONS

Background on the GATS

The General Agreement on Trade in Services (GATS) is an international treaty administered by the World Trade Organisation (WTO). The treaty came into force in 1995 and Australia has been a signatory since its inception.

The GATS aims to provide a framework of rules for international trade in services.

Under the GATS, WTO Members can negotiate commitments to open specific service sectors to foreign competition and to afford foreign suppliers the same treatment as domestic suppliers. Members can also make commitments about the operation of their domestic regulation of services.

However, the nature and extent of these commitments are strictly a matter of choice for Member governments. Member governments can choose not to make commitments in a particular sector. They can also structure their commitments so that they can discriminate between foreign and domestic suppliers.

Members cannot be forced under the GATS to open up service sectors to foreign competition or to provide foreign suppliers with the same treatment as domestic suppliers. The GATS also unequivocally affirms a Member government’s right to regulate, and introduce new regulations on, the supply of services.

The current GATS negotiations

Article XIX of the GATS provides a mandate for regular rounds of negotiations with the aim of achieving progressively higher levels of liberalisation of international trade in services, in line with the objectives of the Agreement. The current round of GATS negotiations was launched in January 2000.

At the WTO Ministerial conference in Doha, Qatar, in November 2001, WTO Ministers agreed on timeframes for the commencement of the market access phase of the GATS negotiations. Under the Ministerial declaration, Members should lodge their initial requests by 30 June 2002.

Members are expected to respond to these initial requests by 31 March 2003.Members are not obliged to respond positively to any particular request. Nor is there any requirement for reciprocity. That is, a request made by a Member in one area does not mean the country is obliged to accept a similar request made of it.

The Doha Ministerial declaration specifically reaffirmed the right of Members to regulate, or introduce new regulations on, the supply of services. The Doha declaration also affirmed that the services negotiations would form part of a broader round of trade negotiations, covering other sectors and issues such as agriculture, industrial goods, intellectual property, investment and competition. The Doha round, as it is termed, is scheduled to conclude in January 2005.

Australia’s initial GATS requests

Australia’s objectives in the current GATS negotiations are to improve the number and quality of market access and other trade-related commitments made by our major trading partners in services, whilst safeguarding our interests in those areas where we may not wish to make commitments.

Australia has made initial GATS requests of 33 WTO Members. These requests will seek the removal of market access barriers and regulatory measures that discriminate against Australian service exporters in overseas markets across 17 service sectors.

The countries covered in Australia’s GATS requests are located across the globe. In particular, requests have been directed at the European Communities and their Member States, USA, and Canada; countries in North Asia, South Asia, and South East Asia; and some countries in Latin America, the South Pacific and Africa. This profile is consistent with Australia’s status as a services exporter with geographically diverse trading interests.

The sectors covered in Australia’s GATS requests are:

• Accountancy
• Architecture
• Engineering
• Legal
• Services related to mining
• Computer and related services (eg, software implementation, data processing, installation of computer software)
• Construction
• Distribution
• Education
• Environmental services
• Financial
• Maritime transport
• Pipeline transport
• Freight logistics (ie, services related to the movement of goods through and within national borders, such as cargo-handling, storage and warehousing, transport agency, container station and depot services, and inventory management services)
• Air Transport (ie, air transport services not directly related to the exercise of traffic rights such as food and beverage serving, cargo handling, and bulk storage of liquids and gases)
• Telecommunications
• Sporting services (eg, sporting event organisation and promotion, operation of sporting
• facilities).

Some examples of the kinds of barriers we have raised with various trading partners in our sectoral requests include:

• Lack of transparency in domestic regulation, particularly in the administration of licensing arrangements.
• Strict quotas on the number of foreign firms that can be established in a local market.
• Restrictions on the amount of equity an Australian firm can take in a local enterprise.
• Restrictions on the form of legal presence an Australian firm can establish overseas.
• Issues relating to the recognition of Australian qualifications.

The requests also address "cross-sectoral" issues relating to commercial presence restrictions (eg, rigid limits on foreign ownership of firms in the services sector; requirements for joint ventures with local firms; restrictions on the acquisition of interests in land for business purposes), lack of transparency of domestic regulation, and restrictions relating to the temporary movement of natural persons who are service suppliers.

Australia’s requests of developing and least developed country WTO Members are generally less extensive than for developed WTO Members. This is in line with GATS provisions that there be appropriate flexibility for developing country Members.

Some examples of specific negotiating objectives and requests in some sectors are as follows:

Legal services: we will be seeking commitments from trading partners that enable Australian lawyers to enter an overseas market and practice home country (Australian) law, international law, and third country law (where qualified), without having to meet the more burdensome requirements of having to qualify to practise host country law. When combined with the right to form voluntary commercial associations with local firms, these commitments would create a regulatory environment in which local and foreign lawyers and firms could engage in providing a wide range of transnational legal services to local and international clients

Environmental services: we will be seeking to create a more open and predictable international trading environment for our dynamic and rapidly growing environmental services industry. We will be seeking market access commitments in activities such as waste water, refuse disposal, and services relating to the protection of ambient air and climate. With regard to services relating to water for human use, Australia’s requests deal with our interests in exporting technical advice and consultancy services, rather than direct investment overseas (ie, establishing a commercial presence), since this is where our commercial interests are currently most pronounced.

Education: we will be making requests that are oriented to ensuring that orderly, transparent processes are in place for accrediting courses and programs offered by Australian institutions, and seeking greater transparency in approval processes for Australian institutions seeking to establish a presence offshore.

Telecommunications: in addition to targeting barriers to the establishment of a viable commercial presence overseas, we will be seeking commitments which clarify and strengthen the pro-competition principles set out in the WTO’s Reference Paper on Basic Telecommunications. These principles aim to ensure that international carriers can gain reasonable, non-discriminatory, cost-oriented access to local network facilities. Procedural transparency issues, such as the existence of an effective, independent regulator, transparent and efficient licensing procedures, and dispute settlement processes will be emphasised.

These and other sectoral interests in our requests of trading partners were foreshadowed in various negotiating proposals that have been tabled in the Council of Trade in Services in Geneva over the last eighteen months (see copies on DFAT website: www.dfat.gov.au/trade/services/negotiations.html).

Further information about Australia’s interests in the GATS negotiations can be obtained from the DFAT website www.dfat.gov.au This includes the WTO Doha bulletin produced by the Office of Trade Negotiations, DFAT, which provides regular updates and progress reports on the WTO services negotations.

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