RESTRICTED
WORLD TRADE S/C/W/21
5March 1997
ORGANIZATION(97-0895)
Original: English Council forTrade inServices
COMMUNICATION FROM AUSTRALIA
Discussion Paper onExchange ofInformation
Thefollowing communication iscirculated attherequest ofthedelegation ofAustralia to
Members oftheCouncil forTrade inServices.
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1. AttheSingaporeMinisterialConferenceinDecember1996,Ministersstatedtheirdetermination
"toobtain aprogressively higher levelofliberalization inservices onamutually advantageous basis
withappropriate flexibility forindividual developing country members, asenvisaged intheagreement,
inthecontinuing negotiations andthose scheduled tobegin nolaterthan1January 2000". Furthermore,
Ministers decided thattheCouncil forTrade inServices should develop aninformation exchange
programme asdescribed inparagraph 47ofthereport oftheCouncil forTrade inServices totheGeneral
Council. Thepurpose oftheinformation exchange is“toallow members tobetter understand theissues
involved andidentify theirinterests ”before undertaking theagreed negotiations onServices.
2. There aremany changes occurring intheServices sector which canbeexpected tohavefar
reachingeffectsonTradeinServices.Theinteractionoffactorssuchastechnologicaladvances,changing
policy approaches andnewbusiness strategies canbeexpected toleadtochanges intherange ofservices
traded, theways inwhich services trade isconducted, themeasures which affect trade inservices,
bothattheborder andinternally, andtheregulation ofservices trade.
3. Australia believes thatitisimportant formembers tounderstand fullythese changes andthe
implications theywillhaveforfuture negotiations onmarket access andthefurther development of
multilateral rules governing Trade inServices. Forthisreason, Australia proposes thattheprocess
ofinformation exchange mandated byMinisters commence withthepreparation ofaseries ofpapers
which examine andassess theimpact ofcurrent andemerging developments onTrade inServices.
4. Specifically, Australia proposes thatfourpapers becommissioned forcompletion bytheWTO
Secretariat ormembers. These papers would cover:
Trends inServices Trade Flows
5. Thenextround ofmultilateral services negotiations willtakeplace against thebackground
ofexpanding Trade inServices, theincreasing importance ofTrade inServices inworld trade and
thechanging composition oftraded services. These trends willhaveimportant implications forthe
setting ofpriorities inthenextround ofnegotiations, bothbyindividual participants andforthe
negotiations asawhole. Inaddition, under Article XIXoftheGATS, theCouncil forTrade inServices
isrequired tocarry outanassessment oftrade inservices inoverall terms andonasectoral basis for
thepurposesofestablishingnegotiatingguidelinesandprocedures.Itwouldthereforeappearappropriate
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tocommission apaper toexamine current andfuture trends inservices trade flows andtoexplore the
implications ofthese trends forthenextround ofservices negotiations.
TheBenefits ofDeregulation andLiberalisation ofServices Markets
6. Inrecent years, many countries haveputinplace policies toliberalise barriers toTrade in
Services andtoderegulate domestic services markets. Measures implemented haveincluded thelifting
ofrestrictions onforeign investment, theissuing ofoperating licences toforeign suppliers, thereduction
ofcontrols oncapital flows andforeign exchange, andthederegulation ofdomestic telecommunications
andtransportation markets.
7. Itmaybeuseful toprepare apaper which documents thederegulation andliberalisation of
servicesmarketsthathasbeenundertakenandidentifiesthebenefitsflowingfromsuchpolicies,including
interms oftheefficiency andcompetitiveness ofservice supply. Thiswillbeimportant forsustaining
themomentumoftheprocessofderegulationandliberalisationwhichmay,inturn,havepositiveflow-on
effects forthenextround ofmultilateral negotiations.
Impact ofNewTechnologies onCross Border Trade inServices anditsImplications forthe
Relative Importance ofother Modes ofService Delivery
8. Itiswellrecognised thatthedevelopment ofnewtechnology inthefields oftelecommunications
andtransportation havebeendriving forces behind theincreasing global integration ofproduction and
distribution systems andmarkets overrecent years. Thishasmade amajor contribution toincreased
trade inbothgoods andservices. Technological innovation continues tomove ataveryrapid pace
andcanbeexpected tohaveaprofound effect onwhich services aretraded andhowthistrade takes
place inthefuture. Inparticular, itislikely toimpact onthetechnical feasibility ofmodes ofservices
supply, withtheelectronic delivery ofservices becoming anoption foragreater range oftraded services.
9. Itwillbecrucial formembers tounderstand theimplications oftechnological developments
forTrade inServices, notonlytoensure thattheyrespond withappropriate policies, butalsotoprepare
forfuture negotiations.
Shifts inBusiness Strategies -Globalisation andHorizontal Integration
10. Service suppliers arebecoming increasingly internationally oriented resulting ingreater foreign
investment andtrade across borders. Corporate strategies arenotonlydesigned toexploit the
opportunities created by,forexample, changes ingovernment policies andtechnology, butarealso
driving theprocess ofchange. Thistrend canbeexpected tocontinue asservices suppliers establish
larger networks, expand their operations toinclude complementary services suchasfinancial and
telecommunications services, andbecome increasingly transnational. Aswithtechnological change,
anexamination oftheshifts inbusiness strategies willbeimportant forensuring thatappropriate
responses aremade atthedomestic andmultilateral levels.
11. Australia would beinterested tohearother Members ’views ontheproposal tostarttheprocess
ofinformation exchange withthepreparation ofthefourpapers described above.