Czech Yearbook Vol. 4 2013

BREGT NATENS – JAN WOUTERS

CYIL 4 ȍ2013Ȏ

part of global value chains.

Nonetheless, the WTO remains the only place where the

global trade community discusses trade in services together. A multilateral solution

is still to be preferred from the point of view of economic efficiency, legal certainty,

and the development perspective of the DDA. Many of the developing and emerging

economies risk the loss of an important negotiation asset once developed Members

reach ambitious agreements on trade in services. However, the bargaining chip status

of services negotiations in the DDA may mean a deal on services may have to be

concluded rapidly if an agreement on other subjects is found. Considering that, it

remains warranted to follow up on the services negotiations at the WTO.

The state of play indicates that a multilateral deal is very unlikely. Additionally,

as stated, the current initiatives are to be situated outside the WTO framework. This

situation has some obvious disadvantages, such as legal uncertainty, increased transaction

costs and economic inefficiency. However, a middle ground exists in the form of the

plurilateral approach. Plurilateral agreements have been part of the WTO system since

the conclusion of the Uruguay Round. As concerns services, they are expressly taken

up in the progressive liberalisation mandate of Article XIX:4 GATS. Interestingly, the

WTO framework is sufficiently flexible to craft plurilateral agreements with different

characteristics. For example, outside GATS, first, a Plurilateral Agreement could be

added to Annex 4 to the Marrakesh Agreement. The rights and obligations from such

an agreement only apply to the Members that are party to it. Second, an agreement

could be concluded through a Ministerial Declaration, as was the case for the ITA.

Third, Members could adopt an understanding such as the Understanding on

Commitments in Financial Services. Alternatively, within the GATS framework,

first, a Reference Paper type instrument could be used to extend the benefits to all

parties on an MFN-basis. Second, a protocol could be added to GATS, such as the

Fifth Protocol to the GATS – also known as the Financial Services Agreement.

Irrespective of the exact nature of a plurilateral approach, it offers four advantages.

First, it partly remedies the strong-arming of Members with less bargaining power in

bilateral negotiations and thus leads to more fair and efficient outcomes. Second, the

transaction costs of plurilateral negotiations are lower compared to RTAs and, if the

outcomes are eventually adopted by more Members, perhaps even lower than in the

case of multilateral negotiations. Third, in comparison to the current second track

request-offer negotiations, where all other Members benefit from the outcomes of

bilateral negotiations, the plurilateral approach addresses freeriding. Fourth, it gives

credit to Members which undertake unilateral liberalisation.

Additionally, securing

sufficient interest for a plurilateral agreement by appealing to economically strong

Members could help to move away from a lowest common denominator approach

At the time of writing, there has not been a vote on the Draft Resolution. European Parliament,

‘Motion for a Resolution on Opening the Negotiations on a Plurilateral Agreement on Services’, B7-

/2013, 4 April 2013, 2-3.

WT/MIN(96)/16, Ministerial Declaration on Trade in Information Technology Products (Adopted

13 December 1996).

Mattoo and Wunsch-Vincent 787.