Services have been a stumbling point in concluding the soap opera we are all familiar with formally called the Doha Development Agenda. Pascal Lamy wouldn't beg to differ, either. In essence, it is a quarrel between North and South. Wealthy countries, particularly the United States, have not been keen on implementing Mode 4 services trade or the "Movement of Natural Persons" (see an earlier post for a review fo the service delivery types. With its motherlode of skilled professionals, India represents one of many poor countries that want to extend opportunities abroad as WTO stipulations should, in theory at least, permit. Mode 4 is just what the name suggests: workers fulfilling international contracts should be able to move temporarily across borders to deliver services.I have long spoken of the WTO being a creation of wealthy countries. This fact is under little dispute and is well-reflected in services trade. It is of little surprise that most of the commitments under Mode 4 are for intra-corporate transferees that facilitate the movement multinational corporations' executives. Let's put the shoe on the other foot, however. Let's say that you're an Indian IT company that wants to send some software engineers to the US to ensure that the CRM software you're working on for an American client is compatible with their existing database. At the current time, it's largely "tough luck" as the US would subject you to traditional immigration regimes not designed with the General Agreement on Services or WTO-GATS in mind. If you were the US, it's an understandable wish to maintain as much discretion over one's migration policies, but declining US hegemony should mean that it's time for a change. Like in many, many other instances, international institutions institutionalize North-South inequalities.
This introduction brings me to today's topic. The remit of WTO Doha negotiations has focused on two main tracks: agricultural market access (mostly of poor countries to rich countries' subsidized and protected markets) and non-agricultural market access (NAMA which mostly concerns rich countries' access to poor countries' goods markets). However, India has been vociferous in raising the agenda of trade in services for reasons identified earlier. Earlier on, some commentators said improved personal relationships between two of the four lead negotiators in US Trade Representative Ron Kirk and Indian Commerce Minister Anand Sharma was a plus for getting a Doha deal done compared to the iffier one between their predecessors. Well, not so fast. Bush is gone and Dr. Singh has won another term in office but we are not really closer than we were before on services. From the Times of India:
In order to expedite progress on the Doha Development Agenda (DDA) under WTO (World Trade Organisation), India on Thursday proposed simultaneous negotiations in services along with issues on agriculture and non-agriculture market access (NAMA). Addressing a two-day mini-ministerial meeting on Re-Energising Doha A commitment to Development, commerce and industry minister Anand Sharma said, ‘‘Since time is of the essence and in order to maintain a balance within the single undertaking, we can consider moving the other issues on the agenda forward." He asked the member delegates whether parallel negotiations in services and other areas can be taken on board in a more proactive member.The immigration debate in the US is filled with protectionist rhetoric tinged with racist undertones. Temporary migration is no exception. This is in part due to America's refusal to treat Mode 4 as more of a trade rather than an immigration issue. What requires clarification to those more reasonable than the America-for-Americans Ku Klux Krowd is the combination of "trade" with "temporary." Understanding, not scaremongering, will carry the day as developed countries aren't going to be overrun anytime soon. My opinion is that India is right to bang on the migration issue even if it means waylaying Doha as the gains from further trade liberalization are minuscule compared to those which can be obtained from liberalization of migration.
The inclusion of negotiation on services along with the other contentious topics like agriculture and NAMA will help countries like India in the bargain, giving them greater maneuverability in trading off gains in one area against concessions they may have to yield in other areas.
Under the Hong Kong ministerial meeting in 2005, an understanding was reached between member countries that a sequential approach would be adopted with negotiations on agriculture and NAMA being prioritized. But to complete the Doha Round of negotiation by 2010, Sharma asked ministers from 35 countries who have come to Delhi whether they would be willing to deviate from the "tried and tested process."
Make no mistake: this is the North-South debate to watch.
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