Last week's article sought to articulate a CARICOM position on global trade in services. This week's article continues that discussion. So far three matters have been identified. These are the activities of the Group of 74, (which include the Group of 24, plus the African group, plus CARICOM) at the WTO; the need for documentation of regional trade in services; and, the issue of better public and stakeholder involvement in the negotiating process.

The fourth matter (to continue the sequence) is that concurrent negotiations within the FTAA and the EU over the post Cotonou arrangements, highlight the importance of maintaining symmetry in the positions that we adopt in various negotiating fora. This will not be easy, as it has already been suggested in this series that the USA's strategy seems to be to secure agreements at the FTAA level, which favour maximum liberalisation. It will then use these as leverage within the wider WTO framework to achieve a more liberal regime than would otherwise have been the case.

The fifth matter is the concurrent negotiations taking place within CARICOM in the field of services. These centre on Protocol 11 and issues related to rights of establishment, monopolies, the movement of skilled persons and capital, social services, landholding, registration of companies, exchange controls, work permits, and subsidies. Here, many of the global issues at the WTO level are replicated on a regional scale. Obviously therefore, it is important to complete negotiations within the Region, in order to provide a sound basis for external engagement.

The sixth matter is that the Region has hitherto adopted the 'positive list' approach to negotiations on services. This has meant specifying the service areas where it intends to liberalise. However, reports suggest that the FTAA is moving towards a 'negative list' format. In this format the areas listed would be only those that are 'not' to be liberalised. In other words, all unnamed sectors will be liberalised. Given imperfect foresight, it is easy to see that there could be wide differences in the results between these two approaches.

The seventh matter relates to the consideration that 'broad based' negotiations, in preference to sectoral negotiations, would better protect CARICOM, and for that matter the developing countries. In sectoral negotiations one side may have the advantage, and more likely than not this will be the side of the rich developed economies. Indeed, experience shows that the areas given priority so far at the WTO have all favoured the rich countries, for example: financial services; maritime transport; basic telecommunications; and professional services. It should be noted that negotiations on financial services and basic telecommunications are already concluded, and that maritime transport was taken up in 2000. To date, the key areas of major importance to the developing countries have not been satisfactorily considered.

Three priorities

The eighth matter is that, overall, there are three broad priorities for the developing countries in the GATS, and CARICOM should support these. These are safeguards, subsidies, and government procurement.

Under safeguards, the concern is for these to be clearly stated and defined, although the Agreement already provides for limitations in certain restrictive circumstances on conditions of entry. In event of emergencies, the developing countries need safeguards. Indeed, it may well be argued that the existence of safeguards could encourage more commitments.

Under subsidies, the concern is along the lines of the familiar infant industry arrangement. That is, developing countries like CARICOM do not compete on a level playing field with the already developed economies, with their entrenched hold on global trade in services. Governments therefore, need to provide time bound assistance to help local firms to grow until they are competitive enough to survive on their own.

Under government procurement, the concern is that both national treatment and the most favoured nation principles may constrain the scope of government action in support of their own economic development. Indeed, some fear that as it stands the GATS Agreement challenges, if not limits, both domestic and international regulation of the environment, natural resources, and universal public services.

The ninth matter is that under the GATS (as indeed for much of the WTO Agreement) there is a built in asymmetry in the treatment of capital and labour. This asymmetry does not favour countries like CARICOM, which are more competitive in the supply of labour than capital.

Finally, the problem of 'size' remains unresolved. Size has not yet recognized as a distinct category applicable only to small developing countries. What has been recognised in the GATS is the 'small supplier' category. This category, however, is not confined to developing countries. Rich developed economies can also have 'small suppliers' of many services.