Canada: New Developments: Canada To Participate In Plurilateral International Services Negotiations

Last Updated: April 15 2013
Article by Len Edwards

Government Invites Stakeholder Input

The Canadian government officially announced on March 16 in the Canada Gazette that Canada would be participating in a negotiation towards a Plurilateral International Services Agreement.  The Notice invites interested parties to submit their views on negotiating issues by April 30.

This new negotiation is an important development.  It represents a continuing effort by the Government of Canada to achieve better market access for Canada's important services sector despite the failure of the Doha Round over the past 11 years to achieve a broader multilateral agreement including services.

With all the attention being paid to Canada's soon-to-conclude negotiation with the European Union, and just-begun engagement in the Trans-Pacific Partnership talks, this much smaller exercise is flying somewhat under the radar.

Although the Government has been consulting with the private sector during the Doha Round regarding services issues, this plurilateral approach represents a "fresh start" to such negotiations in a different setting.  Canadian service companies would be wise, therefore, to update their previous submissions or to make new ones in responding to the issues set out in the Gazette Notice.

These new services talks will be held in Geneva, but take place outside the multilateral WTO framework and at separate premises.  There is some sensitivity in this.  A few Member countries have said that holding separate plurilateral negotiations will undermine the multilateral system.  However, the WTO can legally accommodate plurilateral agreements in certain circumstances, and the 1994 General Agreement on Trade in Services  (GATS) provides specifically for such an approach in the case of Services.  It is thus intended that any new plurilateral services agreement would be brought under the WTO umbrella and made open to accession by non-participant Members.

As hopes for the Doha Round have waned, discussions have been underway for the past year among some WTO Members on the notion of putting together a plurilateral negotiation.  Those involved have shared Canada's view of the need to press ahead with something in this increasingly vital component of international commerce in the absence of a Doha result.  At last count 22 countries have signed up to participate, and others are expected to join in.

Participants include Canada's major traditional economic partners --- the USA, EU, and Japan --- but more importantly for the future a number of significant emerging markets --- Korea, Mexico, Colombia, Turkey --- plus several other important Canadian economic partners such as Chile, Hong Kong (China), Israel, Costa Rice and Peru.

While it is disappointing that the largest emerging markets are not involved so far, it is still possible that India (with its aspirations to be a global services power), and even China could be drawn in.  Another good addition would be the ASEAN group of countries.

Getting a plurilateral negotiating table underway will be an important complement to the bilateral talks Canada has underway with Japan, Korea and prospectively Thailand and others, where Canada can drive for higher quality bilateral results against a rising plurilateral standard being driven from Geneva.

The Geneva talks can also link up nicely with the services discussions underway in the TPP, ensuring consistency between these two broader group settings (building eventually to higher multilateral standards in the WTO) and helping drive quality of outcomes in a region where many services markets are still under development and constrained by lack of openness to the outside.

Already, the decision among participants in Geneva to move from a "positive list" to  "negative list" approach in the eventual plurilateral agreement is a good step forward.  This has been Canada's preferred approach.  It is more favourable to market liberalization since it assumes from the start that all services sectors will be covered and obliges a party to the agreement specifically to list any sector it does not want included in its undertakings.  The "positive list" approach of parties listing those it is prepared to include, inevitably leads to a narrower agreement and leads to delays in the inclusion of emerging services sectors.

While no date has yet been set for a start in negotiations, they should get underway later this year and could progress quickly among this group of like-minded proponents.  Canadian services companies should be keeping a close eye on this negotiation and encouraging government negotiators to seek a high quality outcome.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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