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Jane Moir

Industry fears that discussions on agricultural issues will dominate

Business groups looking to gain ground in services negotiations yesterday warned the WTO ministerial meeting was in danger of getting bogged down by agricultural issues.

'We are fed up seeing WTO taken hostage by the agricultural discussions,' said Pascal Kerneis, managing director of the European Services Forum, a group including global giants such as Siemens, TNT and Deutsche Bank.

'It's not true that you have to make progress on agriculture first to make progress on the others [negotiations],' he told a forum organised by the International Trade Centre and the Agency for International Trade Information and Cooperation at the Regal Hotel in Causeway Bay. 'Services negotiations are not a new story.'

With agricultural tariffs the most contentious issue dominating the WTO landscape this week, business and trade lobbies fear discussions on services negotiations will make little progress.

The current 'request and offer' system - where countries put forward proposals of service liberalisation - has been condemned by business groups as flawed, with 400 initial requests reaping just 70 initial offers as of November 30. So far, just 28 improved offers have been made.

The system 'is not working', Mr Kerneis said, urging negotiations to move up a gear and embrace the notion of targets.

'The idea here is to ask all countries in the WTO to commit to a certain number of sub-sectors, so it will be clear all countries in the WTO will have put a certain effort into the negotiations,' he said.

Such a benchmark system has come under fire from non-government organisations  and developing nations who fear large groups of powerful countries will be able to bully smaller ones into further opening their markets.

'It's not part of our strategy to increase market access everywhere,' Mr Kerneis said. 'LDC's [least-developed countries] developing countries should not feel threatened by this.'

The services industry represents up to 26 per cent of world trade, he noted, while agriculture accounts for just 8 per cent.

To many members, the quality of services  talks hinges on an outcome in agriculture. Jane Drake-Brockman, executive director of the Australian Services Roundtable, however, dubbed the negotiating tactic a 'hollow threat'.

'Frankly, I don't see any evidence anywhere that anyone is really grappling with this subject [services]. It takes a long time to write a services offer and I don't see people grappling with it.'



Services sector seeks fair share of time at the negotiating table