Nov 7, 1987

ENHANCE ACCESS TO SERVICES AND LABOUR MARKETS ABROAD.

GENEVA NOVEMBER 5 (IFDA/CHAKRAVARTHI RAGHAVAN) – Any future framework agreement on trade in services should enhance access of third world countries to services and labour markets abroad and secure transfer of technology to them, Mexico has said in its paper to the Uruguay Round Group of Negotiations on Services (GNS).

Mexico has made these suggestions, at this week’s meeting of the GNS, in a paper put forward as preliminary comments on other papers and some suggestions of its own on elements to be included in any future multilateral framework on services.

The meeting ended Wednesday evening, and the next session of the GNS is set for December 14-15, when discussions will continue and there would be a stocktaking exercise.

Besides Mexico, Jamaica, the U.S., and Sweden for the Nordics countries have also put forward proposals, this week. At earlier meetings, Australia, Canada, and Japan have also put forward some concepts and elements.

The various proposals and concept put forward by the industrial countries all seek to provide for establishment or presence for foreign service providers.

The Nordic paper is on the lines of U.S. proposals, but more generally worded, in calling for liberalisation and access to markets for services and for foreign service-providers on non-discriminatory basis, transparency and national treatment, and for "regional agreements for liberalisation of trade in services".

The Mexican paper views the various elements put forward by other participants as constituting a general framework for conduct of international trade and Foreign Direct Investment (FDI).

"There is nothing in the Punta del Este declaration related to the so-called right of establishment or commercial presence or whatever other name which implies foreign direct investment flows, as some other delegations are implying", says the Mexican paper.

The negotiations, Mexico adds, should stick to what is in the declaration, and namely trade in services without including foreign investment.

But if delegations insist on negotiating the international flow of one production factor (capital) they are well endowed with, the negotiations should also include international flows of labour, another production factor, and one in which Mexico and other third world countries are well endowed with, Mexico underscores.

In these negotiations, it adds, Mexico would be interested in migrant workers, offshore transformation services or subcontracting (known in Mexico as maquiladora industry), in maintenance and repair services, and in construction services.

"Labour is a service par excellence and should be included in the negotiations. We should discuss whether migration laws are an obstacle to trade in services, and whether a bail of 125 percent in any construction work, required in some countries, is or is not an obstacle".

The U.S. Services negotiator, Richard Self, had told newsmen Wednesday that labour per se was not a service that could be included in the general framework agreement advocated by the U.S.

Mexico has also rejected the implicit suggestion in other proposals for "negotiating" with other parties to any eventual agreement on any new proposed regulatory measure on services by the government concerned.

And while there could be same or national treatment for domestic and imported services, this could not apply to producers or sellers of these products, Mexico has pointed out.

The Nordic paper is on the assumption that promoting growth and development is best through increased access to service markets on equal or equitable terms.

While market access could be measured against cross-border barriers where services are directly connected to trade in goods, for most services market access is more often a question of commercial presence in the market on terms which are non-discriminatory compared to those by other competitors in the same market.

Issue of market access should hence be addressed in the context of rules for establishment or commercial presence affecting market conditions, the Nordics say.

The negotiations should deal with discriminatory rules on foreign establishment, taxes, restricted or limited access to distribution channels, and rules affecting supply of highly qualified key personnel for fulfilment of service undertakings.

The GNS at its future meetings is expected to continue discussion on the various elements agreed upon for its work, including comments on various proposals.