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Talks on opening markets for services are faltering, says US

Talks on opening markets for services are faltering, says US
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First Published: Thu, Jan 10 2008. 11 54 PM IST

Task at hand: Members of the US Congressional Services Caucus have written to WTO director general Pascal Lamy (above) about their disappointment with the progress on services liberalization. (Photo:
Task at hand: Members of the US Congressional Services Caucus have written to WTO director general Pascal Lamy (above) about their disappointment with the progress on services liberalization. (Photo:
Updated: Thu, Jan 10 2008. 11 54 PM IST
Washington, DC: Negotiations in the World Trade Organization (WTO) over opening markets to banks, insurance companies and express delivery are faltering, the Bush administration and lawmakers have said.
The US, European Union (EU) and other rich nations got only a few other nations to offer to open their markets as part of the services negotiations in the Doha Round, according to documents distributed in Geneva last month.
“We find the amount of progress on services liberalization to be very disappointing,” Republican Phil English of Pennsylvania and five other members of the Congressional Services Caucus wrote to WTO director general Pascal Lamy last week. “What is currently on the table falls very short.”
Task at hand: Members of the US Congressional Services Caucus have written to WTO director general Pascal Lamy (above) about their disappointment with the progress on services liberalization. (Photo: Ramesh Pathania/ Minnt)
The concern in Washington over this aspect of the trade negotiations shows the difficulty the 151 member nations of the global trade body are having in the negotiations that have moved in fits and starts since they began in late 2001.
The major issue has been cutting farm subsidies in the US, EU, Japan and other rich nations and reducing industrial tariffs in large developing nations. Yet, services negotiations may bring the biggest benefits to rich and poor nations as middle-income nations such as India, China and Brazil open their markets to foreign investment, according to World Bank researchers.
The WTO papers, distributed in Geneva last month and since posted on the website of the Coalition of Service Industries, recap the progress in the talks. The US and EU pressed the large developing nations to allow more investments from US banks such as Citigroup Inc., permit operations of express delivery companies such as United Parcel Service Inc. and open up tourism, telecommunications and energy services to foreign companies.
The response was limited, the papers show. For example, in financial services, many of the countries have refused to promise to maintain current levels of openness. In postal services, only one country of the 20 asked to open markets even agreed to pledge not to change current practices and cut out foreign competition.
The papers didn’t detail which countries made offers and which held back.
“Services is still fuzzy, and we are going to need more progress there,” Christopher Padilla, US undersecretary of commerce, said in an interview. India, Brazil and other large developing nations “need to recognize that the Doha Round is a trade negotiation, not a charity auction” in which they can get something for nothing, he said.
Lobbyists for banks, insurance firms and other companies are to meet this week to decide how to respond to what they see as unacceptable responses. “We’re not pleased, and we need to figure out where to go from here,” said Selina Jackson, vice-president for international public affairs at United Parcel.
The developing nations, led by Brazil, said they have offered all they can and won’t offer more. These countries “are holding back until there is an agreement in agriculture” and for industrial goods, said Jeffrey Schott, a fellow at the Peterson Institute for International Economics in Washington, DC and a former US trade negotiator. “Progress on the other issues has lagged.”
Still, Schott and Padilla predicted there may be a breaklater this year. “This president really wants a Doha deal,” Padilla said, referring to George W. Bush. “I think other countries recognize that.”
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First Published: Thu, Jan 10 2008. 11 54 PM IST