New Zealand Files Its Services Requests

New Zealand Files Its Services Requests

New Zealand's services exporters will benefit from New Zealand's participation in international negotiations aimed at breaking down barriers to services trade, Trade Negotiations Minister Jim Sutton said today.

Mr Sutton said New Zealand's initial requests under the World Trade Organisation's General Agreement on Trade in Services negotiations on services trade were submitted last week to our 24 top trade partners, through their representative offices in Geneva, headquarters of the WTO.

The requests are aimed at improving market access for New Zealand's key services exports, he said. The requests do not contain any relaxation of current domestic policy.

Mr Sutton said services industries were vitally important to our economy, and an increasing component of our trade.

"According to figures from Statistics New Zealand, our services exports have increased by 55 % since 1997. Last year services exports were almost 25% or $10,033 million of total exports earnings, and are growing faster than good exports.

"We expect the WTO GATS negotiations to create opportunities for New Zealanders to increase their exports in innovative industries such as engineering, architecture, education, consultancy, environmental management and tourism. New Zealand's services requests reflect the creativity and diversity of New Zealand's services exports, and our strong belief in their value to foreign consumers."

Mr Sutton said the initial requests were the result of work by government agencies in close consultation with industry bodies, trade unions, individual exporters, non-government organisations and interested parties.

"The initial requests are the start of the negotiating process, and we'll continue to consult stakeholders on their content. We can revise our requests, or add to them later on, to make sure that they cover the full range of New Zealand's export interests."

WTO members are due to respond formally to the requests by 31 March 2003. Mr Sutton said that New Zealand did not intend to make any further commitments relating to service industries within New Zealand at this stage. "New Zealand is already an open and liberal services market, and we'll be looking for a similar degree of openness for our own exporters from our WTO partners."

He said requests from other WTO Members had been received.

"The Government will hold further intensive consultations with all interested parties in formulating its response to these requests, to ensure the outcome of the negotiation meets New Zealand's overall interests."

For more information: CATHIE BELL on 04 4719855 or 025 998467 email Catherine.Bell@ministers.govt.nz

GATS Background

When the Uruguay Round of multilateral trade negotiations was concluded in 1994, agreement was also reached on freeing up trade in services: the General Agreement on Trade in Services (GATS). The GATS, of which New Zealand has been a member since its commencement, established the first set of multilaterally agreed rules for international services trade.

Under the GATS, WTO members can negotiate legally binding undertakings (called "commitments") to open specific services sectors to foreign competition, and to treat foreign suppliers as they would domestic suppliers. However, the nature and scope of the commitments remain completely in the hands of the Member governments. The GATS is a flexible agreement, and under it Members retain the right to regulate services sectors and pursue their policy objectives. These can include choosing not to open services sectors to trade, or limiting the conditions under which foreign suppliers can participate in their markets.

The Current Negotiations

The GATS aims to progressively liberalise the conditions under which international trade in services takes place. The current round of GATS negotiations began in January 2000. At the WTO Ministerial Conference in Doha last year, WTO Trade Ministers agreed on two further deadlines for the services negotiation, as part of the launch of a comprehensive round of trade negotiations. These set a date of 30 June for the submission of Members' requests for further commitments, and of March 2003 for the submission of offers in response to the requests.

New Zealand's initial GATS requests

New Zealand's initial requests cover our major trading partners. Requests have been submitted to the European Communities and their Members States, the US and Canada, countries in North Asia, South Asia and South East Asia, and some countries in Latin America, the South Pacific and Africa. The spread of requests reflects New Zealand's diverse export interests. However, New Zealand recognises the special circumstances of developing countries and has tailored its requests appropriately, while seeking an overall gain for our national interest. The provisions on special and differential treatment for developing countries built into the GATS Agreement explicitly support such action.

New Zealand's requests focus on the following key exporting sectors: *Business services *Communications services * Construction and related engineering services * Education services * Environmental services * Tourism services * Recreational, Cultural and Sporting Services * Transport Services.

Some typical examples of the kinds of restrictions that are the subject of our requests include:

* Requirements to establish particular types of business entity in order to supply services to other markets, such as joint ventures, which impact on our small and medium enterprises; * Failure to recognise New Zealand's professional qualifications and occupational registration; * Foreign equity caps which limit New Zealand participation in overseas markets; * Restrictions on the numbers of foreign firms that can establish in other markets; * Restrictions on the numbers of foreigners that may work in certain services sectors; * Requirements to be a citizen of a country in order to provide a particular service in that market.

Office of Hon Jim Sutton