WASHINGTON - U.S. Trade Representative Susan C. Schwab announces U.S. - EU agreement on compensation for modifications to the EU’s WTO services commitments.
Despite the current hiatus in the Doha Services negotiations, the United States continues to work effectively with other World Trade Organization (WTO) members in support of the global trading system. The agreement announced today represents the successful conclusion of compensation negotiations with the European Union for modifications to their commitments, due to EU enlargement, under the General Agreement on Trade in Services (GATS). The United States worked closely with Brazil, Hong Kong, Japan, Canada and 12 other WTO Members to negotiate this compensation package with the EU, which provides new benefits to suppliers of services in the $8.6 trillion European services market.
"This agreement demonstrates the value of the multilateral process and how the U.S. and other WTO Members continue to work constructively together in that forum," said Ambassador Schwab. "This is the first time that any WTO Member has used the procedures for modifying GATS commitments. Over the last three years we have worked cooperatively with Canada, Hong Kong, Brazil, Japan, and the other 16 affected Members to make these untested, complex procedures work. We are pleased that this cooperative effort has produced a meaningful compensation package whereby the EU and its member states will offer new opportunities in financial services, engineering, computer services, advertising, and other service sectors."
Background
The EU requested modifications to its commitments under the GATS resulting from the accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Austria, the Republic of Poland, the Republic of Slovenia, the Slovak Republic, the Republic of Finland, and the Kingdom of Sweden to the European Communities. Each of these countries had previously undertaken commitments individually under the GATS. In harmonizing their individual commitments with those of the EU as a whole, they had to modify their laws and regulations in a way inconsistent with prior commitments.
Similar to the General Agreement on Tariffs and Trade (GATT) 1994, the GATS allows Members to modify or withdraw commitments, provided that they negotiate offsetting compensation such that the overall level of market access remains the same. The Member modifying its schedule must negotiate the specific form of compensation with the Members affected by the change. In this case, negotiations for compensation focused on new commitments to effectively rebalance the overall market access commitments of the EU.
The agreed compensation package contains new commitments on telecommunications that provide important clarity concerning the coverage of all basic and value-added telecommunication services. In addition, the compensation package provides new or enhanced commitments in several other sectors, including public utilities, engineering, computer, advertising, and financial services.
