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Colección: Trends for a common future
Autor: Sidney Weintraub
Título: Technical Cooperation Needs for Hemispheric trade Negotiations

3. Services

The inclusion of trade in services in international trade negotiations is a relatively recent phenomenon. The initiative came from the developed countries, primarily the United States, and was at first resisted by many developing countries out of concern that multilateral negotiations would result more in opening their markets to service imports than in providing equivalent benefits to them. The consent of developing countries to include trade in services came in part because of their own interest in promoting service exports, such as tourism; and, in part in hemispheric countries, from the general import liberalizing trend that emerged during the 1980s. The growth of subregional integration agreements in the hemisphere fostered greater opening of trade in services among countries at generally comparable development levels.

The major negotiating breakthrough at the global level came in the Uruguay Round with the conclusion of the General Agreement on Trade in Services (GATS). While the GATS established a new path, the commitments made there by LAC countries were not overwhelming. Mexico went further in liberalizing trade in services when, in 1994, it entered into NAFTA with the United States and Canada. Many individual countries have privatized and opened their telecommunications industries to foreign competition. The FTAA offers an ambitious forum for liberalizing trade in services in the hemisphere, but the undertaking is difficult because of national uncertainties about the proper degree of opening and the technical complexities in many service sectors which many hemispheric countries have not mastered.

The need for TC in the overall negotiating process has been discussed sufficiently and will not be repeated again, except to highlight the need for the negotiators to understand what already has been done in the services field. This includes the undertakings of hemispheric countries in GATS, in the provisions of the subregional agreements among hemispheric countries, and for Mexico in NAFTA.

One should keep in mind that negotiation of trade in services cuts across many sectors and therefore differs markedly from a negotiation in a specific sector. Negotiating experience, both global and hemispheric, is less extensive for trade in services than for merchandise trade. Consequently, it is more difficult to specify the TC needs in the services negotiation than in many other groups because there is less certainty about where the services negotiations will go. It is likely that the needs of participants in the Negotiating Group on Services (NGSV) will expand as the negotiations proceed.

Nevertheless, some TC needs already can be seen clearly. The services negotiations are certain to extend to international telecommunications, an activity that is expanding at what conservatively can be called a phenomenal pace. The negotiators from almost all hemispheric countries, but particularly those with small economies, will need guidance on what the issues are in this field. Fast-paced changes are taking place as well in trade in financial services—particularly when these changes are combined with advances in communication technologies—and these will require updating about current world practices for negotiators from many hemispheric countries. The experience of recent years of weak banking structures leading to financial and economic turmoil highlight this need for deeper knowledge by the negotiators and the experts who support them. The negotiators and the experts supporting them need to understand the position of their countries on the inflow of portfolio capital. Much the same can be said about the need for background information about transportation, one of the inevitable important issues in services negotiations.

These three sectors—telecommunications, financial services, and transportation—are cited not because they will be the only ones involved in the services negotiations, but rather because they inevitably will be important themes. The negotiations, however, will cover all service areas.

Much background on issues in the services area is being provided by the Tripartite Committee, but the three component agencies are unlikely to be able to do so without outside assistance because the themes are both complex and dynamic. As in other fields, decisions must be made whether to give training priority to technical personnel or to the negotiators.

Trade in services is closely linked with foreign investment. Much trade in services also involves persons transplanted from home countries to the countries in which the services are to be provided. Professional services such as engineering, architecture, law, and accounting are provided both by a cross-country mode and by resident foreign specialists. Providing communication services requires vast investment as well as transplanted experts familiar with the situation in the home market and the linkages between the two, particularly at the outset of new ventures. Trade in financial services is increasingly linked to ownership of foreign financial institutions, whether commercial banks, investment banks, or insurance companies, and experts from home offices almost invariably accompany the financial resources—certainly at the outset. The growth in tourism has been accompanied by foreign ownership of hotels and other facilities.

In the first instance, what is needed to conduct negotiations for trade in service is background information. This includes the following: what are country obligations stemming from the Uruguay Round; what obligations are included in the various subregional integration agreements; what are the technical requirements for negotiating in such dynamic and significant fields as information technology, communications, finance?2 In addition, two matrices were prepared for the second meeting of the NGSV in January 1999 on the initial negotiating positions and ideas of participating countries on issues likely to be included in a future agreement.

Some themes inevitably will be negotiated, and the participants already are aware of their need to understand the issues and the implications for their countries of liberalizing markets. This will require TC in formulating the technical aspects of a services agreement; constructing a list of commitments and reservations in existing agreements; identifying national measures and barriers to trade in services; understanding related themes when entering into commitments in complex service sectors; and grasping the nature of regulatory reform that will be required.

Because the service negotiations are closely linked to foreign investment, the two negotiating groups will have to coordinate their deliberations. Movement between countries of professionals and technicians is a necessary corollary of increased trade in services and it would be desirable to get some indication of how extensive this will be. Finally the TC needs will expand and become clearer as the negotiations proceed. All these requirements should be taken into account in the planning for the services negotiation and many of them already have been. The ability to define the technical needs in specific service areas as the basis for providing TC should improve as the negotiations proceed.