New Zealand's initial GATS offer made public

The New Zealand Government has made public its initial offer for the latest round of negotiations in the General Agreement on Trade in Services.

Trade Negotiations Minister Jim Sutton said the initial offer New Zealand has now tabled in Geneva was a first step in a negotiations process that would open doors for New Zealanders selling skills around the world.

He said that exports in the services sector ? covering trade in sectors such as professional advice, tourism, and earnings from foreign students ? had grown faster in the past five years than goods exports, even at a time when dairy and meat exports had boomed.

"Services are a key area for any smart economy. It can help overcome the disadvantages of being geographically isolated for New Zealand. We have to engage with the outside world. Our starting point is that our economy is open to foreign competition in those sectors where it benefits the wider economy, where it is in our interests.

""That's why - with our initial offer in the GATS negotiations - we don't have to open up our own economy any more than it is already. The services negotiations give us a chance to leverage off our existing policies. We have already done the hard yards ourselves ? we are now looking to get our trading partners with closed services markets to get up to our level.

"If they are prepared to match us in some areas, we are signaling that we could be prepared to stick to some of what we have already done. That way, we are presenting ourselves as a benchmark in this negotiation, not as a pacesetter for further liberalization."

Mr Sutton said the Government was making the initial offer public so that there shouldn't be any room for misunderstandings or scaremongering:

· Public health, public education, and water distribution systems are not included.

· Local councils do not lose their right to regulate in the interests of their communities.

· The interests of Maori, as reflected in the Treaty of Waitangi, continue to be upheld.

· There will be no changes to the screening mechanisms for foreign investment, and the Kiwishares will not be touched.

Cabinet also agreed that the following statement about public services should be made along with New Zealand's initial offer. "New Zealand's overall approach to the WTO services negotiations under the GATS, and to the preparation of this offer, has been undertaken on the basis that Article I.3 allows for a government to provide, regulate or fund (including through subsidisation) public services such as public education, public health and social welfare services, in the manner it determines best meets broader policy objectives. In this respect, such services should not be subjected to the same disciplines as private services with purely commercial objectives."

Mr Sutton said the initial offer included some new sectors, such as postal and courier services, credit reporting and collection agency services, environmental consultancy, urban planning consultancy, landscape architecture consultancy, interior design services, and services relating to the placement and supply of personnel. In addition to these new sectors, New Zealand has offered to strengthen its existing commitments in areas such as engineering, computing, veterinary, financial, telecommunications, and transport services.

He emphasised that the initial offer was conditional and revocable. "This means New Zealand can withdraw them if we don't receive good enough counter-offers from our trading partners."

Mr Sutton said the MFAT had heard from more than 200 groups and individuals in the past two months, in addition to consultations with key stakeholders during the past two years. MFAT will continue to consult as the negotiations continue. The negotiations are expected to last till at least 2005.

GATS was only a part of the overall Doha Development Round. No GATS agreement would be concluded without progress in other areas, such as agriculture and industrial goods. Mr Sutton said that the New Zealand negotiating team would carry out its work in accordance with the 10 guiding principles set out by Cabinet. A copy of these is attached.

Ten Guiding Principles for preparing New Zealand's Initial Service Offer:

The Government will, first, adopt the same overall approach to the initial offer that guides New Zealand throughout all aspects of the WTO negotiations, that of advancing the national interest. This means that New Zealand will be guided by the overriding objective of securing tangible overall benefit. As such we will adopt a hard-nose negotiating approach. We will not be pursuing any unilateralist negotiating agenda but seeking reciprocal benefit. Second, New Zealand is strongly committed to advancing improved terms and conditions for our services exporters. We will accord priority to achieving advances in sectors where our export interests are strongest and where we can enhance the services sectors contribution to growth and innovation. New Zealand's approach to its initial offer will take into account the need to advance those particular interests effectively. Third, the initial offer will be essentially conditional and revocable. That is to say, where the government may decide to propose commitments, these will be "initial" not only in the sense of their timing in the process, but also in terms of substance. New Zealand will reserve the right to modify or withdraw them in light of the subsequent developments in negotiations, particularly in light of the responsiveness of our trading partners to our requests both in the services sector itself and in light of the overall development of negotiations. Fourth, the government does not intend to make any initial offers to change actual current policy settings (including for local government) and would be well within them. In other words, whatever decision is ultimately made as to the coverage of New Zealand's initial offer, at most we would be offering to commit to, on a conditional basis, settings that reflect our settled policy in certain areas. There is sufficient negotiating coin in this respect. Fifth, the government will continue to ensure that the initial offer will in no way override our present GATS reservation regarding the treatment of Maori persons or organisations. Sixth, the government will make no initial offer that would limit the government's right to provide, fund or regulate public services, such as health or education. Seventh, the government will make no initial offer involving privatisation of public services or of public entities, or which would affect Kiwi Share arrangements. Eighth, New Zealand's initial offer will not require a lowering of any of New Zealand's quality standards in any area. Ninth, an initial offer will not involve any change to New Zealand's immigration regime. Tenth, New Zealand's initial offer will take full account of the actual state of negotiations, particularly in light of the responsiveness of our trading partners to New Zealand's own interests. This will, among other things, mean that we take into account the fact that this will be the first step in a process that is set to run until 2005. It will also mean that the government will judge where to pitch New Zealand's offer taking into account what others are doing overall in the negotiations.

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