Trade in Services: The Doha Development Agenda Negotiations and U.S. Goals

Publication Date: September 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Trade

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Abstract:

The United States and the other 147 members of the World Trade Organization (WTO) are engaged in a set or "round" of negotiations called the Doha Development Agenda (DDA). The DDA's main objective is to refine and expand the rules by which WTO members conduct foreign trade with one another. A critical element of the DDA round is the negotiations pertaining to foreign trade in services. Trade in services has been covered under multilateral rules only since 1995 with the entry into force of the General Agreement on Trade in Services (GATS) and of the Uruguay Round Agreements creating the WTO.

The negotiations on services in the Doha Development Agenda (DDA) round have two fundamental objectives. One objective is to reform the current GATS rules and principles. The second objective is for each member country to liberalize or open more of its service sectors to foreign competition. The WTO services negotiations have been going on for more than five years. However, as with the negotiations in agriculture and non-agriculture market access, the services negotiations have proceeded slowly with missed deadlines and few results. The next critical deadline is the Hong Kong Ministerial in December 2005, when negotiators are supposed to have many serious issues resolved.

The prospects for the negotiations are difficult to evaluate at this point. It is not unusual for negotiations to lag as participants wait to place their best negotiating positions on the table until just before crucial deadlines are reached. WTO negotiators are looking at completing the Doha Development Agenda Round by the end of 2006. U.S. negotiators also face the June 30, 2007 deadline at which time the President's trade promotion authority will expire. Under this authority, trade agreements are given expedited (limited debate, no amendments) congressional consideration.

Several factors will determine if and when the services negotiations will be completed. One factor is the political will the WTO members can muster to overcome the obstacles that hamper the negotiations. Another factor is to what degree the various participants are willing to compromise on goals in order to reach agreements. And a third factor is how quickly the issues in agriculture and nonagriculture market access are resolved; the sooner they are resolved the sooner negotiators can devote their attention to the services negotiations. This report will be updated as events warrant.