The voice of the European Service Industries for International Trade Negotiations in Services

WTO Public Forum 2010

Role of Non-State Actors in the WTO

(Session 3) Organized by: CUTS International
Sub-theme I - The WTO and the players that influence the multilateral trading system

Wednesday, 15 September, 14:00 16:00 Meeting Room: D

Role of business in shaping the WTO and whether WTO serves their interests
Pascal Kerneis Managing Director

 The voice of the European Service Industries for International Trade Negotiations in Services

ESF covers most services sectors, including: Insurance Banking Business services: IT &
Computer; consulting, advertising, after-sales services

Professional services:
legal services, accountants, architects, engineers

Audio-visual services Energy related services Environmental services Telecommunication services Tourism Maritime Transport

Construction services Distribution services Postal & Express Delivery services

But no members in Education or Health services

For more information, see www.esf.be

 The voice of the European Service Industries for International Trade Negotiations in Services ESF MEMBERS INCLUDE:

For more information, see www.esf.be

 The voice of the European Service Industries for International Trade Negotiations in Services

Role of Business in shaping the WTO 1st : A provocative reflection: The GATT and then the WTO have been created to facilitate Trade (reduce/remove custom tariffs at borders, reduce discriminatory treatment towards foreign companies, improve market access to non domestic actors...) Trade actors on the world economy are the companies, Hence WTO is there for the business

 But in fact, WTO is first and foremost a member driven organisation, i.e. a governmental organisation. Despite NGOs belief that business are strong towards their government, they are not very good at shaping them, and even less at shaping the WTO. The successes of the 8 first GATT rounds (Dillon, Kennedy, Tokyo, etc.) have most of them been done without strong intervention from the Businesses. It is only during the Uruguay Round that Business started to be active towards their own government not the WTO.
Manufacturing companies to reduce tariffs, NTBs, Services companies in the GATS Financial services and Telecoms in 1997.

Role of Business in shaping the WTO

The voice of the European Service Industries for International Trade Negotiations in Services

 The voice of the European Service Industries for International Trade Negotiations in Services

Role of Business in shaping the WTO

Mobilisation of NGOs and Trade Unions before and in Seattle WTO Ministerial Conference in 1999 has initiated a stronger mobilisation of business Major business organisations joined forces But havent not bee very successful No round launched in Seattle, DDA launched in Doha in 2001 (political circumstances), failure at Cancun, timid progress in Hong Kong with many issues against business priorities, successive failures since in Geneva, incl. in July 2008. Since then, nothing despite business mobilisation

Role of Business in shaping the WTO

The voice of the European Service Industries for International Trade Negotiations in Services

Can Business expect better from the WTO? Yes, in recent years the WTO Secretariat has made efforts to better reach out to Non State Actors (including Business) while preserving its fundamental nature as an inter-governmental organisation. The WTO Public Forum is open to all participants, Most WTO documents become public upon submission, and Regular WTO briefings are held for non governmental organisations (NGOs) and parliamentarians. Hearings in some dispute settlement proceedings have also been opened to the public upon agreement among the parties. But that for all NSAs. Is that sufficient? Does the WTO serve the business interests?

Does the WTO serve the business interests? What does a company need to do international business?
=> It will look at many different criteria to get good conditions:

The voice of the European Service Industries for International Trade Negotiations in Services

Tariffs applied to import goods, rules of origin to be implemented, Business Environment in targeted country (incl. availability and price of human capital, level of education) Potential market (size, income per capita, follow the demand, i.e. corporate customers) Existing competition, special treatment for local players Standards/certifications/testing to be respected by exporters, etc. Benefits prospects at short, medium and long terms Good governance (level of corruption, transparency of the legislation, etc.) State of the regulation (existing barriers at all levels, independent regulatory authority, implementation of the regulations, i.e. Regulatory Certainty) FDI incentives (special zones, tax incentives, corporate tax, etc.) Country Risk Assessment, i.e political stability, security for long term relations WTO negotiations can only deliver a part of these conditions.

 The voice of the European Service Industries for International Trade Negotiations in Services

Does the WTO serve the business interests?

What does business expect from WTO? Provide a multilateral system that fix global rules on the world market so that there are no discrimination among companies (where ever they come from) Lower tariffs, Lower non-tariffs barriers, Lower unfair subsidies, Allow market entry to products and services to non domestic economic actors A world wide international treaty that provides legal security to trade and investment. If one country does not respect its obligations, the WTO can apply sanctions (DSU).

Companies need international agreements to provide legal security to their trade and investments
What EU companies want: 1. WTO DDA 2. Regional Trade Agreements (with Integrated Markets) 3. Multilateral or Plurilateral agreements on investments 4. Bilateral Agreements (FTAs &/or BITs) 5. Autonomous Liberalisation BUT

The voice of the European Service Industries for International Trade Negotiations in Services

=>What is happening in the reality: 1. Autonomous No Legal! Security Liberalisation Lack of 2. BITs, FTAs convergence in a global world
3. WTO ?? DDA started 9 years ago! Last round concluded 16 years ago !!
Conclusion: Business interests are not yet properly served by WTO

 The voice of the European Service Industries for International Trade Negotiations in Services

THANK YOU FOR YOUR ATTENTION !

Pascal KERNEIS Managing Director European Services Forum ESF 168, Avenue de Cortenbergh B 1000 BRUSSELS Tel: + 32 2 230 75 14

Fax: + 32 2 320 61 68
Email: esf@esf.be

Website

www.esf.be