April 26, 1998
Ditchley Park, Oxfordshire

Private sector participants in a conference to debate the future of services trade liberalization, agreed yesterday to form the Global Services Network, which will take the lead in building support for liberalization of world services trade in the next big round for services negotiations to begin in 2000.

The conference, held at Ditchley Park, was chaired by Dr. Jaime Serra, former Minister of Trade and Minister of Finance for Mexico.

Participants from Argentina, Australia, Canada, Costa Rica, the European Commission, France, Hong Kong China, Ireland, Japan, Mexico, the UK, and the US included representatives of the private sector, academia, and public officials acting in their personal capacity. Advisers from the OECD, UNCTAD, and the WTO also participated.

In the last two decades, expansion of world trade in services has been a powerful engine of economic growth. Cross border trade in services now represents more than 20% of world cross border trade, or more than $2 trillion; services account for 60%, or $210 billion, of annual flows of direct foreign investment. Services industries are a major source of innovation especially in electronic commerce, and provide essential infrastructure for trade in goods. They are also essential to improving the economies of both industrialized and developing countries.

Services trade will expand much further. For example, last year's agreements on telecommunications and financial services captured liberalization covering over 90% of world trade in these services, but much of the business covered affected a far smaller percent of the world's population - an indication of the potential further expansion of services trade and of the scope for further liberalization efforts.

Private sector conferees agreed that.

 - In the future, issues related to international trade in services will present challenges to the multilateral trading system that equal in importance and difficulty traditional issues stemming from trade in goods.

 - While bilateral and regional agreements and initiatives can play a useful supportive role, the WTO remains the primary focus for services trade negotiations.

 - The Services 2000 negotiations must achieve much broader coverage of services sectors in national schedules of commitments, and move well beyond tile standstill agreements which characterize the Uruguay Round commitments. They should ensure the application of GATS principles to public procurement of services.

 - Close monitoring of countries' ratification and implementation will be necessary for both the sectoral agreements already signed and the new agreements which will be negotiated in the Services 2000 agreement, and for regional agreements as well.

 - No new restrictions, in the form of duties or otherwise, should be imposed on electronic transmissions.

 - Countries newly acceding to the WTO must make strong commitments to services liberalization as part of their accession process.

 - Domestic regulatory regimes should develop a greater pro-competitive approach to their rule making, and so help to further services trade liberalization. In addition, regulations establishing appropriate pre-conditions for commerce, such as safety and soundness supervision and regulation of financial institutions, should be preserved. Both of these points imply that greater attention must be given to the importance of enlisting regulators in furthering liberalization.

 - Political and public support for trade liberalization will require greater understanding of the benefits of trade liberalization, and the negotiating processes by which liberalization is achieved.

 - Private sector advice and involvement in multilateral trade negotiations - an acknowledged fact and recognized benefit in last year's services negotiations - must be continued and enhanced.

The Global Services Network (GSN) is initiated by an organizing and exploratory committee including members drawn from the Argentine Coalition of Service Industries (UDES), the Association of British Insurers, British Invisibles, the Business Council on National Issues (Canada), the Canadian Bankers Association, the French Federation of Insurance Companies, the Hong Kong Coalition of Service Industries, the Irish Coalition of Service Industries, the London Investment Bankers Association, the Services World Forum and the US Coalition of Service Industries. The GSN is open to participation by all organizations representing services industries and interests, including academic institutions, and individual companies.

Sponsors of the Conference included the American International Group, Association of British Insurers, The Chubb Corporation, EDS, the London Investment Bankers Association, and the Royal & Sun Alliance Insurance Group.

Among the topics discussed were:

 - Assessing the record of efforts to date to liberalize trade in services.

 - The negotiating framework including an assessment of the GATS architecture and its capacity to embrace a new Services 2000 agenda-

 - Sector snapshots capturing the progress of liberalization and framing the future agenda in key sectors, including financial services, telecommunications, professional services, freight transportation, and information technology services.

 - Parallel paths to liberalization including regional agreements, investment disciplines, competition policy, dispute settlement, and public procurement.

 - Data privacy, the New Transatlantic Marketplace, and China's accession to the WTO.

 - The need to improve information about the activities, trade and investment of the services sector.

FOR INFORMATION CONTACT:
ROBERT VASTINE, USCSI, AT (202) 289-7460
SIR NICHOLAS BAYNE, BRITISH INVISIBLES, AT (181) 943-33-57