US wants Asia to lift service sector barriers

WASHINGTON, D.C.: The United States said last Tuesday that it would not endorse any new global trade accord unless it contained a “solid” deal on services, urging Asian nations in particular to liberalize the lucrative sector. “We know that the biggest gains to the global economy are likely to derive from multilateral services liberalization, but the offers on the table right now fail to deliver on that promise,” said US Trade Representative Ron Kirk.

“We have said flat out that there will be no deal without a solid result on services which would result in new market opportunities, but we believe that a positive outcome is still achievable,” he told an international conference on service industries in Washington.

European Union Trade Commissioner Catherine Ashton agreed that “services are critical to the success” of the longstanding Doha Round of trade talks to frame a new global trade agreement.

She said services could play a crucial role in stoking growth to help the global economy emerge from the recession following the recent financial crisis.

“They play a central role in our bilateral agreements and we have to make sure they are moving up the agenda of the multilateral negotiations,” Ashton said at the conference organized by the Coalition of Service Industries.

Services trade, which ranges from architecture to voicemail telecommunications and space transport, is a key component of the World Trade Organization (WTO) negotiations launched in Qatar’s capital in 2001 to establish new global trade rules.

The Doha talks were aimed at boosting global commerce to help developing countries, but deadlock between the major trading blocs has dashed repeated attempts to forge a pact.

Developed nations are trying to price open the services sector in developing nations, which are seeking tariff reductions and subsidy removals in the manufacturing and agriculture sectors in the rich economies.

Australian Trade Minister Simon Crean said the services sector should take a “more driving and strategic role” in the Doha Round, “linking itself to the manufacturing and agriculture sectors to show that it’s adding value.”

He said developing nations producing commodities and manufactures could stamp their mark in global trade if they could deepen their services sectors.

“My real pitch is for the services sector to not see itself as a separate sector, but to see itself as an enabler and a driver and an opportunity for the other two sectors,” Crean said.

Underscoring the rising potential value of the services trade, Kirk said the information and communications market alone was estimated at nearly $4 trillion globally.

The United States, he said, wanted its Asian trading partners to adopt new policies that would facilitate cross-border services trade.

“And if we are successful, that work will amplify our efforts at the WTO,” said Kirk.

“Competition in services can help Asian nations to improve the efficiency of their domestic markets, stimulating domestic demand and reducing their dependency on export-driven growth.”

The United States is currently engaged in talks with fellow economies in the Asia-Pacific Economic Cooperation (APEC) forum to spur services trade throughout Asia. Without identifying them, Kirk said “some of the largest emerging markets are still walled off to services trade by regulations that restrict foreign competition and tilt the playing field in favor of domestic champions.

“Often, these policies are unwritten and unspoken, making it all the more difficult for American companies, particularly smaller enterprises, to overcome the challenges to doing business,” he added. –AFP