Publication Date

3-10-2011

Abstract

[Excerpt] The United States and the other 153 members of the World Trade Organization (WTO) have been conducting a set or “round” of negotiations called the Doha Development Agenda (DDA) since the end of 2001. The DDA’s main objective is to refine and expand the rules by which WTO members conduct foreign trade with one another. A critical element of the DDA round is the negotiations pertaining to foreign trade in services. Trade in services has been covered under multilateral rules only since 1995 with the entry into force of the General Agreement on Trade in Services (GATS) and of the Uruguay Round Agreements creating the WTO.

The negotiations on services in the DDA round have two fundamental objectives. One objective is to reform the current GATS rules and principles. The second objective is for each member country to open more of its service sectors to foreign competition. The WTO services negotiations have been going on for more than 10 years. However, as with the negotiations in agriculture and non-agriculture market access, the services negotiations have proceeded slowly with missed deadlines and few results.

The prospects for the negotiations are difficult to evaluate at this point. It is not unusual for negotiations to lag as participants wait to place their best negotiating positions on the table until just before crucial deadlines are reached. In July 2006, WTO Director-General Pascal Lamy suspended the DDA negotiations, including the services negotiations, because major WTO members could not agree on the terms or modalities for negotiations in agriculture and nonagriculture market access. He resumed the negotiations in 2007. In 2009, negotiators from major groups of developed and developing countries have worked to nail down the basic elements of a draft text; however, they failed so far to reach a consensus on the basic negotiating modalities. 2010 also produced little progress as the services negotiations continued to be hostage to the negotiations on agricultural and non-agricultural market access (NAMA) negotiations, which also showed little progress. In general participants have been reluctant to liberalize services trade much beyond their commitments already established in the GATS.

Several factors will determine if and when the services negotiations will be completed. One factor is the political will the WTO members can muster to overcome the obstacles that hamper the negotiations. Another factor is to what degree the various participants are willing to compromise on goals in order to reach agreements. And a third factor is how quickly the issues in agriculture and non-agriculture market access are resolved; the sooner they are resolved the sooner negotiators can devote their attention to the services negotiations. This report will be updated as events warrant. Many Members of Congress consider the services negotiations to be a critical part, if not the most critical part, of the DDA round. These Members require strong commitments from U.S. trading partners to remove barriers in trade in services as part of an overall trade agreement they could support.. The DDA negotiations, including the negotiations on services, could be the subject of oversight during the 112th Congress.

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Suggested Citation

Cooper, W. H. (2011). Trade in services: The Doha Development Agenda negotiations and U.S. goals [Electronic version]. Washington, DC: Congressional Research Service.

http://digitalcommons.ilr.cornell.edu/key_workplace/811

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