Global services negotiations in the General Agreement on Trade in Services (GATS) were launched in Geneva in February 2000 when delegates from 140 Members of the World Trade Organization (WTO) met to discuss liberalizing services trade. Negotiations in services and agriculture trade began in 2000 as mandated by the "built-in" agenda from the Uruguay Round. While the GATS established a framework for services trade, the Agreement did not bring about significant services liberalization, mostly "standstill" commitments which did not expand market access. Achieving real services trade liberalization is a primary goal of the services negotiations.

To date, seven negotiations have been held in Geneva - six in 2000 - February, April, May, July, October, and December, and a stock-taking session March 19-31, 2001. The next round of negotiations occurs May 9-18. Members are addressing issues ranging from enhancing the classification of services, improving guidelines for scheduling commitments, increasing transparency in domestic regulations, assessing safeguards and subsidies provisions in services, to discussions on exemptions to most-favored-nation (MFN) treatment and a mandated review of the GATS Air Transport Services Annex. Negotiations will continue in Geneva approximately every 8 weeks. Members agreed in May 2000 to a "roadmap," establishing a December 2000 deadline for submission of negotiating proposals and March 2001 for a "stock-taking" and beginning market access negotiations. In July, the United States submitted a Framework Agreement, outlining broad negotiating objectives and offering specific proposals, including support for developing countries, use of supplemental negotiating approaches to request-offer (including model schedules and sectoral clusters), and conclusion of the negotiations by December 2002.

In December 2000, the United States tabled 12 negotiating proposals, covering one cross-sectoral issue (movement of natural persons) and 11 sectors (accountancy; audio visual; distribution; education and training; energy; environmental; express delivery; financial; legal; telecommunications (value-added and complementary services); and tourism services). Building upon the objectives outlined in the July Framework Agreement, the U.S. submissions identify restrictions faced by service providers in each sector. To date, over 50 negotiating proposal have been tabled in the GATS. In addition to those by the United States, 11 proposals were tabled by the European Community, 9 proposals by Japan, 13 proposal by Canada, and additional proposals by Norway, Hong Kong China, Australia, Venezuela, Switzerland, Korea, India, the Dominican Republic, Honduras and El Salvador.

At the March 19-30, 2001 negotiations, Members conducted a stock-taking session, assessing progress to date and how to move the negotiations forward. Members achieved three successes: 1) agreement on final negotiating guidelines and procedures; 2) agreement on a 12-month work program through March 2002; and 3) agreement on revised scheduling guidelines, promoting clarity and consistency in Members' commitments. The negotiating guidelines reaffirm the importance of removing services trade restrictions, reaffirm the right of governments to regulate trade in services, and confirm flexibility in the GATS to address the special needs of developing countries. WTO Members will discuss all negotiating proposals tabled (any future proposals will also be discussed) at the May, July and October 2001 meetings. Additional negotiations are scheduled for December 2001 and March 2002, when a review of progress to date will occur. Members also agreed that the work program is without prejudice to any decisions that may be taken relevant to the services negotiations at the WTO Fourth Ministerial Meeting in Doha, Qatar November 9-13, 2001.

Today's economy requires an ability to compete internationally in high growth, value-added sectors, where services are dominant. Global services trade is valued at approximately $1.4 trillion annually and accounts for approximately 22% of world trade and 80% of U.S. GDP. U.S. commercial services exports have more than doubled from $118 billion in 1989 to a record $281 billion in 1999. The service sector accounts for over 92 million U.S. jobs and is the sector where the vast majority of job growth is occurring.

The U.S. Department of Commerce, in coordination with the United States Trade Representative, is leading the business outreach effort. Commerce's Office of Service Industries has held over fifteen roundtable discussions with service industry groups to establish negotiating priorities. Roundtables have covered healthcare, education and training, express delivery, subscription television, distribution, energy, legal, management consulting, accounting, as well as lodging industry services. These industry consultations will continue throughout the services negotiations. The Department regularly consults with industry advisers via Industry Functional Advisory Committees (IFAC) and Industry Sectoral Advisory Committees (ISAC). The Department also hosted a successful "Services 2000" conference on November 15, 2000, with the active participation of over 300 U.S. services company representatives. On May 10-11, 2001, the Department of Commerce co-sponsored with the Center for Quality Assurance in International Education a conference on exporting issues and trade agreements for the higher education and training sector. May 2001 is "Services Month", in conjunction with International Trade Month, and will highlight the importance of services sectors in the global marketplace. Activities will include policy roundtables to promote private sector participation in the GATS negotiations, seminars to assist service sector companies to enter new overseas markets, and video conferences with Commerce Department officials to promote U.S. services exports.

For additional information on the GATS negotiations, contact Sara E. Hagigh, International Trade Specialist, Office of Service Industries, U.S. Department of Commerce at (202) 482-1542 or Sara_Hagigh@ita.doc.gov. The following Web sites contain useful information on the services negotiations:

WTO
GATS
USTR

U.S. proposals submitted in December 2000

SIF HOME