Services Negotiations in the Doha Round: Promise and Reality

The paper analyzes the state of play in the negotiations and the challenges facing meaningful services trade liberalization in the Doha Round. In tracing the treatment of services in the WTO, the reasons are examined for the success of the 1997 financial and telecommunications services negotiations and how those negotiations marked the entry of services companies and associations as advocates for services liberalization in the WTO.High expectations for substantial reductions in barriers to services trade emerged from the 1997 negotiations, but thus far remain unfulfilled. In the Doha Round the quality of offers has been poor and little progress has been made primarily because many WTO Members cannot perceive the economic benefits of trade liberalization. It is argued that this Round's success is contingent upon the ability of the developed countries to respond to the legitimate concerns of the developing countries. However, too much attention has been given to trying to find a formula for services liberalization and not enough on hard bilateral bargaining. After analyzing various proposals put forth to jumpstart the talks, the paper suggests grouping key WTO Members and identifying "incentives that will motivate those groups." The countries of greatest interest to the United States can be divided into three groups. Offers in agriculture, temporary entry, and emergency safeguards would appeal to each of these and provide a basis for progress.It is concluded that "a Doha Round that does not contain substantial benefits for services is a Round that will have failed" and will not have industry support if it is to be implemented by the US Congress.J. Robert Vastine is the President of US Coalition of Service Industries (CSI) in Washington, DC. Prior to joining the CSI, he served as President of the Congressional Economic Leadership Institute, a bi-partisan, non-profit foundation that helps educate Congress on issues affecting US economic competitiveness. His extensive Capitol Hill experience includes posts as Staff Director of the Senate Republican Conference, Minority Staff Director of the Senate Committee on Government Affairs; Legislative Director for Senator John H. Chafee of Rhode Island; and Legislative Assistant for Congressman Thomas B. Curtis of Missouri. His Executive Branch experience includes service as Deputy Assistant Secretary of the Treasury for International Trade and Raw Materials Policy and Vice President of the Oversight Board of the Resolution Trust Corporation, which was chaired by Secretaries of the Treasury Brady and Bentsen, and he has had extensive private-sector experience. Vastine is Chairman of the official Industry Trade Advisory Committee for International Trade in Services (ITAC 10), which advises the US Trade Representative. He was a fellow of the Institute of Politics of the John F. Kennedy School of Government at Harvard University, and has written a number of articles on US trade policy. Vastine is a graduate of Haverford College and the Johns Hopkins University School for Advanced International Studies.