Wednesday 4 November 1992



Geneva 2 Nov (Chakravarthi Raghavan) -- A week-long meeting of the UNCTAD's 'Standing Committee on Developing Services Sectors:

Fostering Competitive Services Sectors in Developing Countries' ended here last week with an unanimously agreed work programme on development of services sectors and several policy areas relating to Trade in Services.

Arising from the Cartagena Commitment at UNCTAD-VIII and the terms of reference of the Standing Committee set by the Trade and Development Board in April, the work programme relating both to the development of services and services sectors in developing countries as well as some of the policy issues on trade in services, was surprisingly adopted by the first meeting of the Standing Committee without much controversy or tension that had enveloped the issue both at Cartagena and at the Board meeting.

At Cartagena after the agreement on the various issues had been negotiated and accepted, in the final plenary the US came back to deliver a long explanatory statement and interpretation virtually questioning and challenging the document in several parts.

At the April Board meeting too, the US took a hard line position in trying to keep out of UNCTAD any policy issues relating to the trade in services questions being negotiated in the Uruguay Round and will come within the purview of a future General Agreement on Trade in Services. The US, with other industrialized countries, also took the position that work in UNCTAD should focus in this, as in other areas, on domestic policies of developing countries and not on their international dimensions or policy framework.

Third World participants at the meeting of the Standing Committee said that while many of the industrialized countries had made their usual caveats about need to avoid duplication of work, and need to coordinate activities with other relevant organizations, none of them objected to the policy-oriented work in several areas nor were any 'controversies' (about UNCTAD and GATT roles) brought up.

The reasons for this was not clear.

One view is that unlike before and at Punta del Este (where the Uruguay Round negotiations were launched) where the US took a gung-ho attitude to put 'services' under the rubric of 'trade' into the General Agreement and was opposed by the developing countries, the US position and views have changed considerably, even though it was not always reflected in the stands of the Reagan-Bush ideologues at UNCTAD or the UN itself.

There is perhaps now a greater realisation that much more work needs to be done both to develop conceptual and other ideas on various issues and that the old habits of discussing and developing a consensus within the North in the OECD and then pushing it through the GATT may no longer work or suffice.

The agreed work programme seeks to promote transparency in services development and trade, foster competitive services sectors and strengthen technical cooperation in these activities.

Under Transparency the Standing Committee is

If and when the Uruguay Round of MTNs is concluded and the General Agreement on Trade in Services (GATS) under it comes into being, there would be a framework of rules and disciplines to govern this 'trade' which, by its very nature goes far beyond the normal concept of international 'trade' in goods when they cross the international frontiers, both the developed and developing countries have taken a leap in the dark in that there is no data available on the extent of the 'trade' and the effect of any 'liberalisation' or exchange of concessions on a country's economy.

Though the GATT and many others use the IMF balance-of-payments data as proxy for data on trade in services, and some of these are used in projecting figures like 250 billion dollar boost to the world economy by the conclusion of the Round, everyone agrees that the IMF data are so defective, conceptually and statistically, that a proper framework of data collection and compilation would need to be evolved.

Even during the Uruguay Round negotiations, this issue of lack of data was repeatedly raised, and all the statisticians of various organizations involved, the UN, UNCTAD, OECD etc all underscored the need for both clear definition and a conceptual framework for collection and compilation of data at national levels and internationally to enable a clearer picture to emerge.

The agreed work programme in this area would atleast begin this process.

Under the rubric of fostering competitive services sectors, the Standing Committee's work programme includes:

In carrying out its work, the Standing Committee has been asked to give particular attention to the situation of the least developed countries and suggest ways and means for improving their capacity.

The Standing Committee has also been asked, in carrying out its activities, to identify the areas where technical cooperation should be strengthened.