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GATS negotiations to resume

published 5 March 2009 updated 5 March 2009

WTO negotiations aimed at liberalizing the international trade in services, including education, are set to begin again after nearly a year-long hiatus.

The chair of the WTO’s services talks, Mexican ambassador Fernando de Mateo, announced that intensive talks on the General Agreement on Trade in Services (GATS) will be held Mach 30 through April 8.

Ambassador de Mateo said the negotiations will focus on all sectors and include meetings of working groups on financial services and domestic regulation.

However, the global economic meltdown has cast new doubts on whether WTO member countries will be willing to open up sensitive sectors like financial services at a time when governments are bailing out financial institutions and considering new regulatory measures.

Behind the scenes, some countries have indicated that they may be pulling back on previous offers they’ve made on banking and asset management services.

At a news conference last month, Hamid Mamdouh, head of the WTO’s services division, sought to head off such concerns by insisting that trade liberalization has not contributed to the current crisis.

“The lesson learned from the Asian financial crisis of 1997 was that liberalization was not a factor in the crisis,” he said.

However, other observers say that the development of new financial regulations could effectively put the brake on further trade talks.

“In services negotiations, developed countries are pressing developing countries to open financial markets and accept new financial instruments,” says Martin Kohr, director of the Third World Network. “But this may be obsolete because we expect the Group of 20 to come up with new financial regulations to control the speculating activities of financial institutions.”

Meanwhile, the Obama Administration in the United States may not take part in the upcoming GATS meetings, citing what it sees as a failure of the major newly emerging economies such as China and Brazil to improve their offers.

Officials with the United States Trade Representative office say the current offers on the table represent “virtually no progress” and they are waiting for political guidance from the White House before proceeding with further talks.

Speaking at a conference in Washington in February, assistant trade representative for services and investment Christine Bliss said emerging countries need to be serious about improving their commitments.

“It really raises a serious question as to whether the key emerging markets, especially India, China, and the ASEAN have any intention of offering new market access,” she stated. “We at USTR are currently waiting for political guidance as to how to proceed with respect to the services negotiations [and] the entire Doha Round.”