Service negotiations since the UR:

As noted above, some service negotiations were  extended  beyond  'the UR agreements,  and  agreement  in these sectors  was reached  later. The UR agreement  itself mandated farther  negotiations  on  liberalisation  of service  trade to start in 2000. The ministers  at Doha essentially  endorsed the agenda that had been agreed upon earlier by  the Council for Trade in Services. Most of the procedures and technical guidelines had already been'agreed  upon as also the scheduling of commitments. Participants were to submit their initial request by 30 June 2002 and initial offers by 31 March 2003. The Cancun ministeria reiterated these time lines. But compliance with this time-table has been poor.

Initially, 69 offers covering 52 members were received. Later,  28 offers covering 52 members were revised. An analysis shows  that most offers are in modes  1-3. Even where offers are made in mode 4  they are usually tied  to commercial presence. Only 3%  of  offers cover  independent professionals. There are also significant  limitations  on foreign equity participation and on the number of suppliers permitted entry, or the  type, namely the  legal  structure of  the entity.

Dissatisfaction with the progress of negotiations has resulted in a re- examination of the requestloffer method adopted  for  trade  liberalisation in services. Accordingly,  the Hong Kong Ministerial m  2005 allowed  the request offer negotiations to be conducted  in a plurilateral manner (allowing joint requests by groups of countries) in addition to the bilateral process that had been adopted  till  then. The ministerial also  set a revised  time-table.  Any outstanding initial offers should be submitted as soon as possible. Initial Plurilateral offers should be made by 28 February 2006 or soon thereafter. A second round of revised offers shall be submitted by 31" July 2006, and the final draft schedules of commitments  by 31" October 2006.

Substantively, the Hong Kong Ministerial agreed that  in modes  1 and  2, commitments should  be  made  at  existing  levels  of  market  access on  a non-discriminatory basis across sectors of interest to members. Also mode 1 access  should not  require commercial presence. Therefore, requirement  of commercial presence should be removed from offers of liberalisation under mode  1.  It is  further stated that where commitments exist  under  mode  1, commitments under mode 2 should also be made.

Commitments under mode 3 should be made more liberal by allowing  for enhanced levels of  foreign  equity  participation, removal  or  substantial reduction of economic needs tests and allow greater flexibility on the types of legal entity permitted. Similarly, members are encouraged to  improve  their offers under mode 4:  allow greater scope for contractual services suppliers,
independent professionals  and  others de-linked  from commercial presence, increase duration of stay and remove or substantially reduce economic needs tests.

The negotiating document agreed to at  the Hong Kong ministerial had been unilaterally  put forward by the Chairman  of  the Negotiating Group on Services despite the strong opposition  of developing countries  (M. Dubey).  The plurilateral approach accepted  in this  document will  lead  to  greater liberalisation in developing countries as they will find it difficult to face the joint pressure from several powerful countries. Liberalisation will also be speeded up by the acceptance  for  consideration  of  'sectoral and modal approaches'  to negotiations as  under this countries would be required to open up a minimum number of sectors and to agree  to a minimum extent of opening across  sectors.