Tab 5 DEVELOPING COUNTRY (LDC) POSITION ON SERVICES NEGOTIATIONS General LDC Obiectives Do minimum necessary to obtain leverage for other negotiating groups of greater priority to LDCs (e.g., textiles, tropical products.) Preserve ability to promote/protect infant services industries, particularly in currently unregulated areas. Improve transborder mobility of unskilled services Strengthen domestic services industries through LDC Approach Fewer obligations for developing countries than for developed countries. Special provisions for developing countries to deal with their perceived needs in services trade. Principal Features of LDC Proposals Special development provisions Two-tier system with fewer obligations, longer phase-in periods. Disciplines on restrictive business practices by large corporations. Provisions for balance of payments difficulties. (Some recognize that these would have to be exceptional and temporary.) Transfer of technology obligations (not supported by the more moderate LDCs) Market access provisions Importance of symmetry between movement of capital (establishment) and movement of labor. Strong preference for positively listing Other substantive provisions National treatment should not be automatic Coverage Must include "sectors of interest to developing countries" but no definition of which sectors these are. Reservations More should be allowed for developing countries. Freeze Opposed to "freeze." Non-application Wants Opposed to non-application in all forms. Request/Offer Is the centerpiece of the LDC approach to liberalization in the future; LDCS would like to minimize liberalization in this Round. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE EXECUTIVE OFFICE OF THE PRESIDENT WASHINGTON JUI 2 : 1990 July 19, 1990 Congressman John J. LaFalce Chairman, Task Force on the International Competitiveness of U.S. Financial Institutions 2367 Rayburn Building Washington, DC 20515 Dear Congressman LaFalce: Thank you for inviting me to appear before your task force on July 17th. I appreciate having had the opportunity to discuss with you, Congressman Bereuter and Congressman Torres the ongoing GATT negotiations on services, particularyly financial services. In response to your requests, I am enclosing the following documents: 1. 2. 3. 4. 5. 6. my prepared statement, the U.S. proposal on services, the EC proposal on services, the proposal on services from a group of developing a side-by-side comparison of the three proposals, and a series of exhibits prepared for the March 1990 meeting of our Services Policy Advisory Committee which outlines the key issues involved in the services negotiations. In response to your question as to whether the U.S. position on cross-retaliation between goods and services trade is explicitly reflected in our services proposal, I have checked and found that our text is indeed silent on this point. In clarifying with my staff why this is the case, I was reminded that when we drafted the proposal last September, we decided to cross-reference the provisions on dispute settlement in our services text (see Article 19) with our overall position on dispute settlement in the Uruguay Round, which is being negotiated in a separate group. Despite this technical omission, however, I can assure you, as I did at the hearing, that the U.S. position is in favor of crossretaliation. We have articulated that position repeatedly to our trading partners during the course of these negotiations, although many of our trading partners continue to disagree with us and the issue remains unresolved. Please let me know if there are additional written materials you would like. Sincerely, S. Bruce Wilson Assistant United States Trade |