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Overview: General Agreement on Trade in Services (GATS)
Summary of New Zealand's Revised Conditional Offer
How to Read New Zealand's Initial and Revised offers
Reading New Zealand's WTO commitments and offers
The services sector is crucial to New Zealand as it accounts for some 66% of gross domestic product, 28% of exports, and is a focal point of our transformation into a knowledge-based economy. Services exports are growing at a faster rate than exports of goods.
As a growing exporter of services, New Zealand relies on multilateral, legally enforceable rules for trade in services. The ongoing services negotiations at the World Trade Organization (WTO) are critical to New Zealand because our services exporters need access to international markets, and fair and equitable treatment once there. The current General Agreement on Trade in Services (GATS) negotiations will determine the framework within which New Zealand entrepreneurs-particularly small and medium-sized enterprises-are able to sell New Zealand innovation, skills and creativity to the world. Our GATS objectives are, therefore, fully consistent with, and are a further extension of, the objectives the Government seeks to achieve through its Growth and Innovation Framework (GIF) policies.
At the WTO Ministerial Conference in Doha, Qatar, in November 2001, WTO members set two key deadlines for services negotiations. The first deadline, June 30, 2002, was for the submission of each member's initial requests to other members, stating areas of interest for market access commitments. The second deadline, March 31, 2003, was for the submission of each member's initial offer on specific sectors.
New Zealand's 2003 initial conditional offer included the following service areas: various business services, postal and courier, construction and engineering, management consultancy, consultancy on environmental services, and maritime and air transport.
In July 2004, WTO Ministers agreed that a further round of services offers should be submitted by 31 May 2005. New Zealand's revised offer included: creation in New Zealand's commitments on Mode 4 supply of services (movement of natural persons) of a category of Independent Services Suppliers de-linked from commercial presence; reduction in the scope of producer board carve-outs; improvements to New Zealand's legal services commitments; and commitments in respect of a range of commercial services where New Zealand's regulatory regime is already open. The focus on Mode 4 is designed to respond to developing countries' requests for WTO members to improve their offers in this area.
Progress in the GATS negotiations, together with developments in other negotiating areas, will be reviewed at the WTO Hong Kong Ministerial Conference in December 2005.
New Zealand's revised offer will only become legally binding if the Government is satisfied with the overall level of trade liberalisation achieved at the end of negotiations. In other words, New Zealand is free to add, remove or modify any element of its offer until a final agreement that meets New Zealand's objectives is reached.
The GATS negotiations are a central component of the WTO Doha Development Round. A successful outcome to the Doha Round could generate billions of dollars as a result of more liberalised trade, particularly in agricultural products. As well as benefiting New Zealand, this would translate into millions more people in developing countries participating in the global economy and improving their living conditions.
In the GATS negotiations, New Zealand has paid special attention to the requests for market access made by developing countries. In particular, it has improved commitments in sectors of interest to developing countries, such as professional services and the temporary movement of skilled business people. In respect of the latter, the revised offer would allow certain groups of business people to enter New Zealand to deliver services without their needing to belong to a company with a physical commercial presence in New Zealand. Because such a presence is expensive, its removal would reduce a barrier to participation in services trade by developing countries.
As with New Zealand's initial offer, no part of the revised offer involves any change to existing policy settings. In other words, New Zealand has offered to bind in the GATS no more than the current level of access to its services markets. In practice, the actual level of access currently available to our WTO partners may in some cases be greater than what it is bound in the GATS.
New Zealand's revised offer has been prepared in conformity with the Ten Guiding Principles adopted by the Government in 2003 to guide preparation of New Zealand's initial services offer.
Specific improvements offered:
New Zealand's horizontal schedule (horizontal commitments apply to all sectors in which New Zealand has made an offer) of temporary movement (Mode 4) commitments:
Legal services
Business services
Producer Board carve-outs
Most-favoured nation (MFN) exemptions - exemptions to the general WTO rule that New Zealand trades with all members on a MFN basis
Technical corrections - clarification of our postal offer and temporary movement of natural persons (Mode 4) offer and commitments to improve transparency.
In order to read New Zealand's initial and revised offers it is helpful to review the General Agreement on Trade in Services (GATS) structure. The GATS consists of a general framework of rules and obligations and a mechanism by which Member countries can make specific commitments to liberalise their services markets. These market access undertakings are set out in each Member's individual "Schedule of Specific Commitments."
The GATS structure provides all WTO Members with the flexibility to decide for themselves in which sectors they will undertake obligations and whether to maintain or remove barriers which may exist in these sectors. This means New Zealand decides for itself what sectors and to what extent it will open to foreign competition. For example, a WTO Member can allow a service to be delivered by a foreign service provider in its country, but could impose a condition, such as requiring that the service be provided through a partnership or joint venture. " How to read a GATS Schedule" [external link to WTO website].
New Zealand lists its specific GATS commitments in its Schedule of Specific Commitments. These are known as the Uruguay commitments and are now binding commitments.
In developing an offer, countries review all the commitments for each sector in their existing Schedule of Specific Commitments and then choose to take one or more of the following actions:
Both New Zealand's initial and revised offers are conditional on the overall level of liberalisation that will be produced at the end of the negotiations. Each country retains the right to add, remove or modify any element of its offer at any time until the completion of the negotiations.
All of these are scheduled in the revised offer document. Thus, New Zealand's revised offer contains our Uruguay commitments together with both our initial and revised offers. These have been presented in different ways so readers can distinguish between them. This is explained below.
New Zealand's existing market access commitments are scheduled in plain text. These commitments are already binding. Offers are modifications to these commitments.
New Zealand's initial offer consists of modifications to our existing market access commitments. These modifications appear in the offer using bold, strikeout and italics to modify existing text.
New Zealand's revised offer consists of modifications which were made as part of New Zealand's initial offer as well as additional modifications to our existing market access commitments. Modifications stemming from New Zealand's initial offer appear using bold, strikeout and italics as described above. New modifications as part of New Zealand's revised offer are indicated using shading as follows:
For additional information, please read "How to read a GATS Schedule" [external link to WTO website]
Read New Zealand's revised offer (including its initial offer and Uruguay commitments) PDF (983KB)
