RESTRICTED
WORLD TRADE S/C/W/17/Add.1
19September 1996
ORGANIZATION(96-3690)
Original: English Council forTrade inServices
COMMUNICATION FROM AUSTRALIA
Proposal fortheSingapore Ministerial Meeting
Addendum
Thefollowing communication iscirculated attherequest ofthedelegation ofAustralia to
Members oftheCouncil forTrade inServices asafollow uptotheprevious submission indocument
S/C/W/17.
_______________S/C/W/17/Add.1
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Work Programme onServices
Thepurpose ofthispaper istoprovide background information ontheAustralian proposal
fortheSingapore Ministerial Meeting. Details oftheproposal arecontained inS/C/W/17.
IntheAustralian proposal fortheSingapore Ministerial Meeting, itwasproposed thata
preparatory workprogramme commence in1997forthenextround ofmultilateral services negotiations.
Thisproposal reflects Australia 'sbelief thatthenextcomprehensive round ofnegotiations, which are
duetobegin nolaterthan1January 2000, willneedtobepreceded byanexamination oftheimplications
ofthemany rapid changes thatareoccurring intheservices sector. Thiswork willbeessential for
maintaining therelevance ofthemultilateral disciplines included intheGATS, andthevalue ofthe
market access commitments undertaken byGATS Members, tointernational traders inservices.
Thenextround ofmultilateral services negotiations willtakeplace against thebackground
of:
Expanding trade inservices
- In1994, global exports ofcommercial services roseby8percent. Over theperiod
1984to1994, global exports ofcommercial services recorded anaverage annual growth
rateofover10percent. Thiscompares favourably tothe8percentannual average
growth raterecorded bymerchandise exports overthesame period.
Theincreased importance oftrade inservices
- There hasbeenalongtermriseintheshare ofservices inworld trade. In1994, trade
inservices accounted forover20percentoftotalworld trade compared to17per
centin1984.
Thechanging composition oftrade inservices
- Traditionally travel andtransport services haveaccounted forthemajor share oftraded
services. However, otherservices suchastelecommunications, financial, professional,
information technology andbusiness services arebecoming increasingly important.
- According toIMFstatistics, between 1988 and1994 theshare oftransportation in
services tradedeclined from25.6percentto22.8percent,theshare oftravel exports
wasstable atjustover29percent,while theshare ofother services rosefrom38.6per
centto43.5percent.
Thetrends inservices tradearebeing driven byanumber ofinterrelated developments. These
include:
Government policy settings:
- Many countries haveinplace policies toliberalize barriers totrade inservices and
toderegulate domestic services markets. Policies toliftrestrictions onforeign
investment, liberalize market access barriers, reduce controls oncapital flows and
foreign exchange, andtoensure theefficient delivery ofservices through, forexample,
deregulation oftelecommunications andtransportation markets, haveincreased the
opportunities forforeign suppliers tocompete indomestic services markets. TheS/C/W/17/Add.1
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changing nature ofservices trade mayalsoleadtochanges intherange ofmeasures
affecting suchtrade.
Theintroduction ofnewtechnology
- Itiswellrecognized thatthedevelopment ofnewtechnology inthefields of
telecommunications andtransportation havebeendriving forces behind theincreasing
global integration ofproduction anddistribution systems andmarkets overrecent years.
Thishasmade amajor contribution toincreased trade inbothgoods andservices.
Technological innovation continues tomove ataveryrapid paceandcanbeexpected
tohaveaprofound effect onwhich services aretraded andhowthistrade takes place
inthefuture. Inparticular, ithashadaneffect onthetechnical feasibility ofmodes
ofservices supply.
- TheInternet, forexample, isleading torapid changes intheparameters ofservices
markets. TheInternet isexpanding thepotential fortradethrough computer networks
byproviding access tonewgroups ofclients andbyexpanding therange ofservices
thancanbeoffered. Themarkets created bytheInternet areborderless, have
outstripped theregulatory framework andareconstantly changing.
Thestrategies ofservice suppliers
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 andbecome increasingly transnational.
Thisprocess ofglobal integration ofservices markets islikely tocontinue unabated inthefuture.
Theforces forchange areadding constantly tothecomplexity offuture market access negotiations
andtheurgency oftheneedtodevelop relevant andtimely multilateral rules. Thenewround of
multilateral services negotiations willneedtotakeintoaccount theimpact ofthese developments on
the:
- range ofservices traded;
- scope fornewservices;
- modes bywhich services aresupplied;
- measures which affect trade inservices, bothattheborder andinternally; and
- regulation ofservices trade.
Australia believes thatinviewofthesedevelopments, the2000negotiations willbeacomplex
undertaking andthatthere would beconsiderable value forWTO Members inundertaking awork
programme tobuild-up analytical capacity andunderstanding ofthechanges thataretaking place in
theservices sector.S/C/W/17/Add.1
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Akeyelement ofawork programme would beaninformation exchange ondevelopments in
services sectors ofMembers since theentry intoforce oftheWTO Agreement andbefore theyear
2000. Thiswould provide acomprehensive overview oftheactual situation inallthesectors subject
tonegotiation andastarting point fortheCouncil forTrade inServices 'assessment oftradeinservices
overall andonasectoral basis. Such aprocess islikely tobetimeconsuming andanearly startis
therefore desirable.
Inaddition totheexchange ofinformation, itwillbenecessary fortheCouncil forTrade in
Services toidentify anyother information thatwillberequired foracomplete assessment ofTrade
inServices tobemade. With aviewtothe1998 Ministerial meeting, consideration willalsoneed
tobegiven totheguidelines andprocedures forthenegotiations. There mayalsobeother factors
relevant tothenegotiations which theCouncil willneedtoconsider. Forexample, Australia has
suggested thattheCouncil make anassessment ofservices liberalization provided forinregional trade
arrangements. Thiswould beanimportant adjunct toother analytical work inviewofdevelopments
inservices rules andaccess inthese arrangements.
Australia hastherefore proposed thatMinisters attheSingapore Ministerial Conference agree
toinitiate awork programme beginning in1997forthenextround ofmultilateral negotiations, taking
theparameters setoutinArticle XIX.3 asabasisforcommencement ofsuchwork. Australia suggests
thatwork in1997 commence withanexchange ofinformation.