Education International
Education International

ASEAN members press for emergency safeguards in GATS

published 24 April 2007 updated 24 April 2007

Eight member countries of the Association of Southeast Asian Nations (ASEAN) have renewed their efforts to press for new WTO rules allowing countries to restrict access to their services markets in emergency situations when domestic firms are threatened by foreign competition.

The group - Brunei, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Thailand, and Vietnam - presented an informal paper to a WTO services meeting last month that calls on members to develop an emergency safeguard mechanism (ESM) in the GATS.

The proposal, according to one official from the sponsoring group, received "polite but firm" criticism from the United States and the European Union.

The ASEAN group has long been attempting to build a safeguard mechanism in GATS, an effort that has its origins with the Asian financial crisis of 1997 when foreign firms were blamed for contributing to the financial meltdown in countries such as Thailand and Indonesia. The ASEAN group says that the mechanism is needed so that governments can take temporary measures to restrict the provision of certain services in their markets and protect their infant services industries.

Emergency safeguard measures already exist under the General Agreement on Trade and Tariffs (GATT) and WTO members agreed at the end of the Uruguay Round of talks to undertake negotiations on emergency safeguards in services. Negotiations were declared to have reached a stalemate in 2003.

The United States, the European Union, Japan, and Switzerland have strongly opposed the safeguard proposals, saying it would discourage foreign investment by creating legal uncertainty.