The services section of the Ministerial Declaration released at 2pm Hong Kong time maintains virtually all the controversial aspects of the earlier discredited Annex C. There are a few minor changes that ignore fundamental concerns raised by several countries over the last 2 days in Hong Kong and before in Geneva.

Paragraph 1 preserves the modal objectives present in earlier Annex C. There is a cosmetic change from ‘strive to ensure’ in the earlier annex to ‘to be guided to the maximum extent possible’. Paragraphs 1 and 2 of Annex C are the entry points for sectoral negotiations. Paragraph 2 states that “in order to provide guidance for the request-offer negotiations, the sectoral and modal objectives as identified by members may be considered”. There is a footnote at the end of that sentence making reference to a controversial report by the Chairman of the Council for Trade in Services (TN/S/23). This report contains a list of liberalisation objectives by exporting countries (mainly developed countries) across a whole range of sectors – legal services, telecoms, financial services, distribution, transport, environmental services etc. The new insertion that mentions that the document ‘has no legal status’ doesn’t really mean much as the ability to resist requests will depend on their political will and not on the legality of the document.

The extremely controversial paragraph 4(b) is retained and is strengthened by a specific reference to Article 13 of the GATS. This article mentions that there ‘ shall be multilateral negotiations on government procurement in services under this Agreement within two years from the date of entry into force of the WTO Agreement’. Since this timeline has not been met demandeurs of a government procurement agreement on services can use this language to force developing countries to enter into negotiations.
Paragraph 5 calls for members to develop disciplines on domestic regulation before the end of the current round of negotiations. It refers to an extremely problematic text that was submitted by the Chairman of the Working Party on Domestic Regulation to the GATS Council on 15 November 2005 as the reference document. The underlying principle of the negotiations on domestic regulation is to develop disciplines that ensure that domestic regulatory frameworks are not ‘unnecessary barriers’ to trade. Several developing countries are wary of this and have called for more time to understand the implications of multilateral rules on domestic regulation
Para 7(b) another flashpoint in the negotiations has been critiqued by trade analysts as changing the basic structure of the GATS. The present version mentions that countries shall consider requests to enter into plurilateral negotiations
In Paragraph 10, on technical assistance for developing countries to engage in the negotiations, another cosmetic change. While the earlier language mentioned that this assistance would be given to them to engage in the ‘final phase of’ negotiations, the new draft deletes this section.