European Commission releases 'Provisional GATS Offer"

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GATSwatch, Amsterdam, 1 May 2003 -- Two days ago, on 29 April 2003, the European Commission published its initial GATS Offer.

The text of the initial offer is remarkably close to the draft text that has been available on GATSwatch since mid-March.

The most significant change in comparison with the existing EU GATS commitments is in the so-called horizontal section on the issue of temporary entry of foreign nationals (Mode 4).

The European Commission tries to sell the new mode 4 commitments as "substantial" and a "response to the requests received from developing countries and a clear sign of the EUís commitment to a development round"

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This is echoed in the press release of the European Services Forum, "warmly welcoming" the EU offer, and qualifying it as "attractive [...] on mobility of natural persons", which according to the ESF "would respond positively to many developing countriesí requests to allow the easier movement of foreign service suppliers within the EU on a temporary basis".

It is clear that the ESF is mostly interested in the EU's requests, which are very ambitious and closely tailored to the offensive interests of EU services companies around the world, including the EU request to open drinking water services in 72 countries (which the EU itself is not offering to do, and with good reasons!).

Main elements of the initial offer on mode 4:

  • The maximum entry time for corporate managers and specialists will be extended to three years; graduate corporate trainees will be allowed to stay a maximum period of 12 months.
  • Foreign companies having a contract to provide services to a client in the EU will be allowed to send highly skilled corporate employees to the EU for a maximum period of six months (within a period of 12 months). This period used to be three months. It is important to note that for the most EU Member States the provisional EU GATS offer does not apply to important services sectors like research and development, construction, higher education and entertainment (see EU Provisional GATS Offer, page 16).
  • Individual service suppliers will also be allowed into the EU to provide services for a maximum of six months within one year, but this only applies to highly skilled professionals (the person must possess a university degree or a qualification of equivalent level), and is restricted to the following sectors: 1) Architectural services, urban planning and landscape architecture; 2) Engineering and integrated engineering services; 3) Computer and related services; 4) Management consulting services; 5) Services related to management consulting and 6) Translation services.

The entry of individual service suppliers is also subject to the application of a numerical ceiling, where "the modalities of application and level [still have] to be determined". It is left unclear when this extra criterium will be specified.

When seen in the perspective of the wide-ranging requests that the EU is making to developing countries, the EU offer on mode 4 (in the GATS context one of the most important areas of interest for developing countries) appears very poor. The possibility of concessions in mode 4 has been used by the EU and by business to 'sell' the GATS negotiations to developing countries. The current EU offer shows that this is for the most part an empty promise.

Almost a year after the deadline for tabling GATS requests passed, less than a third of the total WTO membership, including the OECD membership and some developing countries have tabled their requests.

As to the offers (which had to be tabled before 31 March) the EU offer has now brought the total number of offers to 16 (less than 1/8 of the WTO membership). This has nothing to do with an equal process of asking and giving. The current situation boils down to a predominantly unilateral process in which OECD countries are asking developing countries to open up their sevrices markets or bind existing levels of market opening under the GATS.

It seems only a question of the time before developing countries will decide to withdraw their participation from this round of GATS negiotiations, as they have not much to win and a lot to lose.

Erik Wesselius
Corporate Europe Observatory / GATSwatch

GATSwatch is a joint project of Corporate Europe Observatory and Transnational Institute
Paulus Potterstraat 20, 1071 DA Amsterdam, The Netherlands