 | |
| |
TechnologyDaily Mobile
Nations Look Long-Term At WTO Services
by William New
Services negotiators at the World Trade Organization in Geneva will try again this week to break deadlocks on telecommunications and e-commerce. But they are likely to continue to skirt the tough issues until later this year or beyond, sources said.
The United States appears to be lessening its pressure to get a WTO e-commerce work program completed before the November trade ministerial meeting in Doha, Qatar. This is because of the increasing pressure by other countries to include related issues, such as privacy, digital signatures and jurisdiction, sources said. For instance, Japan has tabled a proposal on privacy in the services talks.
U.S. industry does not want to open the subjects for "cumbersome" negotiations in the WTO context, in part because they are not settled yet within the United States. "The U.S. does not have a clear position" in these areas, an industry source said. Online financial services is another touchy area for the United States.
Instead, the United States hopes to get a broad statement in Doha that would address the need to have some guiding principles on e-commerce, the need for e-commerce to flourish and the application of WTO rules to e-commerce, according to a government source in Geneva.
Another e-commerce issue under debate is whether the trade agenda for e-commerce should be addressed as a value chain, cluster or individual sectors. Some suggest that greater value should be placed on a purchased good the further along the purchasing chain it travels. Others argue that negotiators should look at e-commerce as a "cluster," ensuring that incentives exist for investments in infrastructure and all types of services and goods bought online. An example of a cluster-related issue is ensuring open treatment of freight transport in all countries.
Countries this week also will discuss the international moratorium on taxes on electronic transactions, which many countries consider to have expired in 1999. So far, no country has breached the unwritten code, though some, such as India, have said they are considering a value-added tax on e-commerce.
Negotiations on services, covered under the General Agreement on Trade in Services (GATS), are officially underway but moving slowly. The sticky issues of services and agriculture were left unfinished at the end of the Uruguay Round in 1995, with the understanding that they would be built in to negotiations in 2000.
Negotiators tried unsuccessfully to launch a new, broader round of talks at the last trade ministerial in Seattle late in 1999. They are hoping to try again at the next scheduled WTO ministerial in Doha. The United States and the European Union recently have increased efforts to build momentum for the new round, but many nagging questions, such as the breadth of the agenda, remain. Another question is whether a new round can be launched if the U.S. president does not receive trade-negotiating authority from Congress.
Observers fear that the services talks will be suspended or collapse if there is no agreement on a broader round in Doha. For now, however, the services talks may be only "marking time for Doha," a U.S. industry source said. If a new round is launched, services and agriculture likely will fall into the same negotiating track as the other areas. That is the "single undertaking" approach favored by smaller nations with fewer bargaining chips -- no specific negotiation is closed until all negotiations are completed.
The Search For Doha Decisions
So far, countries have put forward only general starting positions in the services negotiations. In March, they agreed to guidelines for the negotiations, which will follow a "request-offer" approach. Countries will request something and make an offer to give up something else.
A proposal exists to create a checklist of e-commerce infrastructure services to be used in the GATS negotiations as the basis for request-offer negotiations. This could include services related to telecommunications, computers, distribution, advertising and some financial services.
Also this week, countries will revisit preliminary proposals on services, such as one by the United States that was tabled last December.
The WTO General Council last month mandated the committee to continue discussing e-commerce. WTO members see e-commerce as a crosscutting issue, and four groups, including the services group, are considering the issue. Canada and Japan have called for a separate, or "horizontal," working group for e-commerce, but there has been no agreement.
An agreement on how to classify electronic transactions in the WTO seems as elusive as ever. "I think they're just stuck," said one industry source. The question is customs-related: whether cross-border purchases of products such as music, books, movies or software online are different from similar purchases in stores.
The European Union insists that e-commerce is a service and therefore exempt from the tariffs that would be imposed on the physical good. But the United States is concerned about a limitation on audiovisual products Europe has under the GATS.
Under a most-favored nation exemption, the European Union retains the right to block any movie that enters its member countries. If the WTO classifies e-commerce as a service, the European Union could be allowed to apply its exemption to movies available via the Internet. Normally, if a country opens its market, it must do so to all companies from all member countries.
Telecoms Still A Priority
On telecommunications, the United States is focusing on getting countries to implement and enforce the 1997 Basic Telecommunications Agreement and its Reference Paper of commitments.
Other key issues include technological neutrality -- giving operators flexible use of their technologies -- and whether a distinction still can be made between public and private networks, an industry source said.
Brazil Makes U.S. Nervous
A topic of concern to the United States is a provision in Brazil's newly offered schedule for implementation of the WTO Basic Telecommunications Agreement. The provision contains a legal prerogative for the executive branch of the Brazilian government to set limits on foreign equity ownership of telecom service providers. This could ostensibly be applied to a single company or industry-wide, a U.S. industry source said.
The Brazil provision poses a difficult quandary for U.S. negotiators. Officials representing the so-called Quad -- the United States, the European Union, Canada and Japan -- have said they cannot accept the schedule as is, while the Brazilian government has said it will not change it. The question before the United States, one source said, is, "Do we accept a flawed schedule, or hold onto an important principle?"
The advantage to acceptance is that companies would get all of the other protections that come with Brazil making a WTO commitment -- for instance, reasonable interconnection rates to complete foreign company calls within Brazil, which is considered a major emerging telecom market. But the risk is that the Brazilian government will exercise the provision or that a precedent will be set.
NEW FEATURE
-Advertisement-
-Advertisement-
-Advertisement-
