Australian Journal of Maritime and Ocean Affairs
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Australian Journal of Maritime and Ocean Affairs |
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Rizal Abdul Kadir[1]
Maritime transport services facilitate international trade. But the vast range of activities in maritime transport services demand a thorough understanding of each driver and associated intricacies. Ultimately, do existing WTO rules impacting maritime transport services, particularly the WTO General Agreement on Trade in Services, meet disparate needs of developing countries? This article first reviews the scope of maritime transport services and the significance of developing economies in world trade. The notion of developing countries’ needs and changing trends are then investigated before scrutinising twin issues on the subject for developing economies namely, special and differential treatment and the issue of market access. Before concluding, the article considers some policy options and contemporary issues facing developing economies on the subject. Enhanced implementation of WTO rules is required for developing economies to benefit from maritime transport services although developing nations themselves will need to be pragmatic in their development policies.
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The United Nations Conference on Trade and Development (UNCTAD) estimated in 2005 that developing countries’ share of world seaborne trade reached 49 per cent of goods loaded and 31 per cent of goods unloaded.[2]
Recent World Trade Organization (WTO) reports on developing countries’ contributions to world output growth and merchandise indicate that developing economies are becoming increasingly significant in international trade.[3]
Developing countries’ share of registered world tonnage (deadweight) also reflects considerable global presence. For instance, estimates from UNCTAD place developing countries’ share of registered world tonnage (deadweight) at 22.6 per cent but this figure excludes open registry territories whose share in the same period reached 45.1 per cent.[4] Statistically it may be contended that WTO Members appear to be progressively moving towards greater liberalisation in maritime transport services under the request-offer approach of the Doha Development Round.[5]
Rules may only be considered effective if they are properly understood and followed. The WTO rules are no exception. The WTO rules are intended to promote trade liberalisation. Through trade liberalisation, developing countries are expected to better integrate into the global economy. This article will focus on the impact of maritime transport services on developing countries. Specific attention will be drawn to the General Agreement on Trade in Services (‘GATS’) as this WTO agreement has a direct impact on maritime transport services. Reference will be made to other WTO rules as the context may require. Like other WTO agreements, GATS has the ultimate goal of promoting trade and development through progressive liberalisation. Another key purpose of GATS is to stimulate economic activity in various service sectors, through commitments secured from WTO member countries. But although in principle the provisions in GATS applies to all service sectors, two exceptions exist. First, services supplied in the exercise of governmental authority are exempted from GATS. Typically these are services that are supplied neither on a commercial basis nor in competition with other suppliers. Secondly, the GATS Annex on Air Transport Services provides that GATS provisions will not apply to measures affecting air traffic rights and services directly related to the exercise of such rights.
It is important to appreciate several preliminary points about GATS. First, GATS distinguishes between four modes of supplying services: cross border trade, consumption abroad, commercial presence, and presence of natural persons. Each mode would naturally attract different implications. Thus for instance, in relation to maritime transport services, it may well be possible that the supply of a particular service may only be possible through simultaneous physical presence of the service provider and consumer. This may occur, for example, by foreign parties having a local presence in a developing country to provide auxiliary services to international shipping companies which themselves may also wish to have a local presence due to strategic and cost benefits. Thus, for the context of this article, the implications of the various modes on a developing country may well differ between each mode. Secondly, the basic obligations under GATS may be placed into two categories: General obligations and specific commitments. The former applies to all WTO members and services sectors. Thus, for instance, under Article II of GATS WTO members are required to extend immediately and unconditionally to services or services suppliers of all other WTO members ‘treatment no less favourable than that accorded to like services and services suppliers of any other country’. In other
words, in principle, WTO members are not allowed to discriminate. Meanwhile, specific commitments are required from WTO members in relation to market access and provision of national treatment. On national treatment, in essence, WTO members are not allowed to favour their local service industry over the competition which is similar though not quite the same as the general obligation noted earlier in relation to Article II.
Since maritime transport services falls under the purview of GATS for purposes of WTO matters, it is necessary to appreciate the two-fold significance of maritime transport services. While maritime transport services constitutes a powerful service industry, maritime transport services is also a core ancillary economic activity to trade in goods. It is for this reason that, although GATS regulates matters pertaining to maritime transport services, other WTO agreements including WTO rules and regulations may well impact issues arising on maritime transport services.
Undoubtedly therefore, the maritime industry is a key facilitator for international trade. In this context, the maritime transport services in the GATS system functions as a catalyst to persuade countries to open their domestic markets. Consequently, such gain would also result in access to domestic port related activities. As discussed in the next section, maritime services cover a wide array of services classified under different ‘pillars’. The impact of WTO rules on these maritime services forms the underlying theme to this article.
This article begins by reviewing the scope of maritime transport services. This is followed by a brief analysis of the impact from developing countries on the world economy. The notion of ‘developing countries’ needs’ merits scrutiny given arguably differing views between developed countries and developing countries on what these needs may be. An understanding of developing countries’ needs may be better appreciated by assessing broad issues within areas such as Special and Differential Treatment (‘SDT’) and Market Access. Both of these are key factors in negotiations on maritime transport services. The status of negotiations on maritime transport services is also considered, in light of the broader negotiations on the General Agreement on Trade in Services. This in turn will require an assessment of issues arising for developing countries before a review of some policy considerations for these nations regarding maritime transport services.
The subject of maritime transport services is diverse but has intricate underlying issues. This has often led to difficulties in WTO negotiations on the topic. The scope of maritime transport services ranges from shipping to port facilities and related services. Each of these services is organised in complex and different ways. For instance, in bulk shipping the services are relatively competitive but in liner shipping the services are dominated by bilateral arrangements, monopolies and even state enterprises. The significance and impact of rate-setting conferences cannot be cast aside.[6] These conferences, typically made up of private shipping entities, would agree on pertinent shipping terms such as applicable rates, cargo type and shipping routes to mention a few. Consequently, this would set the tone for maritime transport. It is acknowledged that many countries exempt the conferences from anti-monopoly laws as conferences are deemed to be a factor of stability. For instance, their private arrangements enable applicable rates to be maintained at certain levels at any point in time. Similarly, conferences have also been deemed a source of technical progress and compared with state-owned enterprises, conferences are widely perceived as having the ability to provide better services to the customers.[7]
However, given the declining impact of conferences, the subject will not be given in-depth treatment. For now, suffice it to note that the practice of exempting the conferences from anti-monopoly laws differs between countries. Ultimately, however, negotiating an optimal solution for progressive liberalisation in the maritime transport sector demands balancing a myriad of issues.
Officially, negotiations on maritime transport services have centred on three pillars of the maritime transport sector: international shipping, auxiliary services and access to and use of port facilities.[8] Each pillar covers a different set of maritime services. For instance, international shipping deals with transporting passengers or freight between ports in different countries. Auxiliary services cover, among other activities, cargo-handling, storage and warehousing. For the purpose of this article, it is necessary to note that in relation to auxiliary services, issues on foreign operators’ rights (i.e. requirements) to establish their own facilities and supply these services in domestic markets are covered in the WTO negotiations. With respect to the third pillar, access to and use of port facilities covers, for instance, pilotage, towing and tug assistance. It is also appropriate to appreciate that WTO negotiations on this aspect of maritime transport services extends to rights (i.e. requirements) of foreign ships to gain access to these services without discrimination. These three pillars constitute the spectrum of issue areas in maritime transport services to which negotiators have developed a framework for negotiations commonly referred to as the ‘Maritime Model Schedule’.[9]
WTO Members negotiate issues arising in these three areas, adopting the ‘request-offer approach’ that was introduced when negotiations on services in the Doha Round resumed in 2000. But some proponents of maritime transport liberalisation contend that the quality of offers from developing countries have been far from satisfactory. A core issue therefore is whether the WTO rules impacting maritime transport services can enable developing countries to make better quality offers while at the same time meet their development needs.
A new area emerged in the current Doha Round to extend negotiations on maritime transport services to include the notion of door-to-door transport i.e. ‘multimodal transport’ – essentially maritime transport service involving multiple modes of transport in addition to shipping.[10] The advocates for this notion contend that emerging market realities and trends in the fields of transport and trade necessitate its inclusion.[11]
But this new area has yet to gain acceptance from all WTO Members. Even a WTO joint statement comprising developed and developing member countries supporting liberalisation of maritime transport services was silent on the issue of multimodal transport.[12] A practical reason for this may be the fact that the notion of multimodal transport goes beyond maritime transport to include road and rail transport. As such, the idea of multimodal transport cannot be considered in isolation from other modes of transport. Effectively, it would appear that the notion of multimodal transport would require consideration of other regulatory regimes and necessitate parallel negotiations on commitments in other transport related sectors.[13] Further, concerns have been raised that multimodal transport liberalisation may also infringe national cabotage laws albeit the impact of cabotage practice and restrictions on trade should not be underestimated.[14] Ultimately, while the momentum towards multimodal transport cannot be ignored, to officially recognise a fourth pillar at this stage would make the negotiation of commitments on maritime transport services far more complicated. However, it cannot be denied that the Doha Round witnessed several attempts at placing the issue of multimodal transport on the negotiating agenda.[15]
Adding to the complexity, it is important also to note that the notion of multimodal transport has in recent times been revisited and negotiations have been extended to include logistics services. This is an important new area of negotiations on maritime transport services.[16] This development stems from the 1996 Maritime Model Schedule which contains key differences from the 1993 Maritime Model Schedule. The former defines the concept of ‘multimodal transport operator’ and ‘multimodal transport services’ but the 1993 model does not define the concept of ‘multimodal transport services’. However, neither version is regarded as an ‘established version’. And for purposes of structuring their commitments, Members have generally adopted the WTO Secretariat Services Sectoral Classification List, commonly referred to as the ‘W/120’ classification.[17] It is important to note that while the W/120 classification and both Maritime Model Schedules are not necessarily contradictory, differences in scope of coverage remains.[18] Clearly, however, both Maritime Model Schedules explicitly exclude the notion of cabotage. Effectively therefore, the issue of cabotage may be said to have been practically excluded from WTO negotiations on maritime transport services although as will be noted later in this article, there remain attempts to include the topic.
While conferences have had a great impact on maritime transport services, their influence has eroded with the emergence of state trading and operators in South East Asia. These operators, which include the likes of operators in developing countries, have become capable of offering on their own services at par with those offered by the conferences.[19] The emergence of such operators from developing countries may in part be attributed to the failure of a United Nations treaty initiative which intended to ‘open-up’ the restricted ‘club’ of the conferences to third world shipping lines through a cargo sharing agreement.[20]
World Bank reports show that shipping remains the dominant mode of transport for international goods, accounting for almost two-thirds of world trade by value.[21] Mindful of the present global economic uncertainty, developing economies, among others, have thus far maintained or strengthened their expansion of output. Together with the Commonwealth of Independent States, the developing economies contributed more than 40 per cent of world output growth in 2007.[22] Developing countries’ share of world merchandise trade (exports plus imports) reached a new record level of 34 per cent in 2007.[23] These two groups of countries are expected to record faster growth in imports than exports; together they are expected to contribute more than one half of global import growth in 2008.[24] And in some developing and least developed countries, sea transport accounts for up to 90 per cent of foreign trade by volume.[25] Such countries are at various levels of development which has perhaps hindered early comprehensive agreement on a set of commitments towards liberalisation of maritime transport services. It is thus incumbent to now briefly explore the notion of ‘developing country’ before later parts of the article investigates potential obstacles towards the desired level of liberalisation on Maritime Transport Services.
The WTO rules provide that country status is a matter of self-declaration and more than three quarters of WTO Members have declared themselves as a developing country.[26] But a ‘least developed country’ is defined according to a UN list.[27]
And along the continuum of developing countries and least developed countries are countries that are either landlocked or in transition.[28] Landlocked states are geographically disadvantaged in that they have no ports. Consequently, the export competitiveness of landlocked countries becomes adversely affected. In turn, the price of their product becomes more expensive to compensate for such disadvantage.[29] Although complex financial modalities are mooted to tackle such and other problems affecting developing countries generally, implementation has been fraught with considerable challenges.[30] Meanwhile, another category of developing country comprises transitional economies which may be characterised as those countries whose economy is in transition from a planned economy to a free market.[31]
Developing country status generally entails benefits from special WTO rules[32]
with extra attention for least-developed countries.[33]
Prevailing WTO rules are silent on the timeline for graduation of a country’s status – but other members can challenge the decision of a member to make use of special provisions available to developing countries.[34]
For convenience, reference to developing countries hereafter will include least-developed countries unless otherwise stipulated.
Empirical evidence reveals no consensus on how the trade needs of developing countries should be reflected in the trade rules and principles.[35] Disparate interests among developing countries make pin-pointing specific needs difficult.[36] Such disparity may be ascribed to different stages of economic growth and varying degrees of competitiveness between developing countries, for example, for ‘like product’.[37] Experience from the Ministerial Conferences in Seattle, Doha and Cancun indicate serious concerns over, inter alia, an evolving trade policy agenda and changing perspectives, roles and influence of developing countries.[38] The difficulty in identifying specific needs of developing countries is compounded given evidence that developing countries are now becoming important exporters of manufactured products.[39] Yet, primary commodities like agriculture, cotton and textile remain significant exports.[40]
Maritime transport services, however, is an issue area that significantly affects developed and developing countries alike.[41] Member countries to date have yet to agree on a package of commitments although various offers have been made. In 1996, at the time when negotiations for maritime transport services were suspended, 42 governments from both developing and developed countries participated in the negotiations.[42] From this, 24 countries submitted conditional offers for Market Access commitments but two countries subsequently withdrew their offers and another two made good their offers by turning them into formal commitments.[43] As of 2005, pursuant to negotiations on the General Agreement on Trade in Services which resumed in year 2000, 68 initial offers were secured from 92 Members that participated in the negotiations. As of end June 2008, 71 initial offers had been submitted by Members and as of the same period the WTO received 31 revised offers.[44]
Thus, as of end June 2008, 82 initial offers remain outstanding representing a little over 50 per cent of the WTO Membership which as of July 2008 stood at 153 with another 29 countries, practically developing countries, currently negotiating their accession to the WTO.[45]
Although the number of offers is considerable, the figures of itself cannot be construed to mean that liberalisation in this sector will be promising. Indeed apprehension on the general quality of offers has stifled progress on negotiations. It is also important to appreciate that the offers themselves have no legal status. In this case, an offer is merely a proposal from a WTO Member on the extent that it is willing to allow market access to its economy. It is important instead to focus on the commitments arising from negotiations on the offers. However, to provide a detailed analysis of the commitments would be beyond the scope of this article but readers may wish to consult the cited literature for an idea of the underlying complexities to negotiating market access in maritime transport services.
While there may be strength in numbers, individually these countries require various forms of assistance and different levels of attention. From the old days of General Agreement on Tariffs and Trade (GATT) right through present day WTO rules on international trade, the framework for assisting developing countries has always been in place. The WTO rules on Special and Differential Treatment and rules relating to Market Access are pivotal towards understanding contemporary issues faced by developing countries on issues concerning maritime transport services. While such rules may be lauded by developing countries, it is necessary to investigate whether problems arising from its implementation are due to the concept or the process, or perhaps both!
At this juncture, it should be noted that while progressive liberalisation is an underlying goal in WTO matters, Article XIX of GATS, for instance, provides that due respect be given for national objectives and WTO Members’ development levels, in individual sectors as well as a whole. Apart from various provisions in WTO agreements ostensibly favouring developing countries, it should also be noted that developing countries are entitled to receive technical assistance from the WTO Secretariat. The next section therefore seeks to examine how WTO agreements, in particular GATS, may help meet the needs of developing countries.
The notion of ‘single undertaking’ in the Uruguay Round requires WTO members to accept all the results of the Uruguay Round without exception. However, there are special provisions throughout WTO agreements to help meet needs of developing countries.[46]
These special provisions are better known as provisions allowing for SDT.[47] For example, the Multilateral Agreements on Trade in Goods, Part IV of GATT contains key principles, objectives and commitments in relation to trade and development which benefit developing countries. Further, there is explicit recognition that special measures may be used by developing countries to promote their trade and development.[48] How developing countries conduct their trade activities in relation to this agreement has a significant bearing on negotiations in maritime transport services, in view that a significant amount of international trade, particularly from developing countries, is transported by sea.
SDT measures can go a long way towards progressively achieving higher levels of liberalisation in the maritime transport services sector. This is particularly true for developing economies with poor infrastructure, inefficient practices or outdated business models. With SDT, such economies can gradually reduce impediments seen as trade barriers in the maritime sector. For instance, in the context of the increasingly important area of multimodal transport, an inefficient transport sector leads to higher transport costs which in turn translate to a more expensive product. Such drawbacks reflect poorly on developing economies whom are then considered as being the producer of non-competitive goods. Understandably, however, any economy would seek measures that would not jeopardise the development and growth of local industries. Thus, in the context of maritime transport services, effective SDT measures are critically required in various segments of the industry of developing economies. For instance, through effective technical assistance and capacity building, developing economies may be more amenable to favourable foreign equity holdings in local shipping companies and perhaps less resistant to restrictions on the establishment of branch offices by foreign carriers. Indeed, a more efficient system in developing economies that does not jeopardise their respective national interests may also lead towards better taxation policies and a more equitable mechanism in implementing port dues.
As noted at the outset of this article, for negotiations on maritime transport services, GATS is the key WTO text. A key provision is Article IV of GATS which is aimed at increasing the participation of developing countries in world trade. In the context of SDT, it should be noted that the Article IV targets, among other things, strengthening the domestic services competitiveness of developing countries through access to technology and improving access of developing countries to information networks. The impact of technology for maritime transport services is perhaps most felt in relation to port services. In essence, this entails building the capacity and competency of ports in developing countries to employ technology in the business. For developing countries that are traditionally labour intensive in their operations, the transition to capital and technology intensive mode of operations would require a range of assistance from human capital development to financial assistance. Ultimately, a key goal of GATS in this area of services is to enable these developing countries to provide the services locally at competitive rates to that of their foreign counterparts.
But in spite of 155 SDT provisions throughout all WTO agreements – with additional references for least developed countries,[49] the provisions are principally good-faith statements in favour of development[50] making it difficult to readily realise net tangible benefits.[51] Observers contend that many developing countries regard SDT provisions as meaningless while many developed countries consider the same as bad economics and outdated.[52] For maritime transport services, providing access to technology and access to information networks, pursuant to the Article IV GATS, without more, would not really enable the developing countries to be self-reliant. Instead, it may make them dependent on foreign service providers with little attention towards building their own capacity. Ostensibly, capacity building remains a key purpose of that SDT provision.
The issue of SDT is significant in both the problems and development of negotiations on maritime transport services. SDT is closely connected with the Most Favoured Nation (MFN) principle in Article II of the General Agreement on Trade in Services (GATS). The MFN principle essentially means ‘favour one favour all’. The Article II, however, allows a member country to derogate from the general principle and thus have in place measures which are inconsistent with the said principle. When WTO member governments agreed to suspend market access negotiations for maritime transport services in 1996, it was agreed that, for the time being, the non-discrimination provision (aka MFN Clause) would not apply to maritime transport – an understanding which currently remains in place. This understanding was significant, as normally countries are required to formally make known which sectors or sections of services in which non-discrimination will not apply.[53] Thus, in other words, until today, as the package of commitments on maritime transport services has yet to be agreed, members are generally assumed to be discriminating until negotiations are completed. It may therefore be said that the negotiations have reached a stalemate position.
To counter the impasse in negotiations on maritime transport services some developing countries have adopted regional trade agreement type of arrangements with developed countries for each to gain access into the others domestic markets.[54] However, problematic WTO rules relating to regional trade type of agreements tend to hamper the effectiveness of such agreements and have shown to be a key setback for developing nations which depend on maritime transport to export their goods.[55]
As a general principle, developing countries will continue to rely on SDT in their quest to integrate into the world economy. Securing SDT for maritime transport services is a negotiation process in itself. But more importantly, implementation of SDT is less clear. For instance, should SDT serve to enable developing countries to meet their WTO obligations or as a basis for exemptions thereof?[56] SDT provisions legitimise derogation from the important MFN principle[57] – effectively discriminating against other WTO Members. For the time being, as noted earlier, all WTO Members – developing and developed countries alike – are deemed to be discriminating. But this phase is only intended to be temporary in nature. As such for now, developing countries and particularly least developed countries will continue to rely on SDT provisions in derogation of their MFN obligations.
Scholars believe SDT to be a source of weakness;[58] this can be attributed to the roots of SDT which attempted social justice but grew into a complex multi-layered plan hampering effective implementation.[59] For instance, when the Generalised System of Preferences obtained permanent legal cover through the Enabling Clause,[60] the intention was to phase out SDT when countries attained a certain level of development.[61] But that level was never defined and trade preferences became dependent on the discretion of preference-granting countries.[62] Such granting of preferences is entwined with the request-offer approach in the GATS negotiations in the Doha Development Round. And in the context of negotiations on maritime transport services, developing countries may be hard pressed to make quality offers under the ‘request-offer’ approach especially if securing appropriate preferences are linked to fulfilling open-ended type of requests. In such a situation, developing countries would find it difficult to derive meaningful benefit from SDT. In this sense, SDT is akin to a double-edged sword! Thus, it is not surprising that rather than reflecting increased levels of integration into the world economy, some observers argue that industries and economies of developing nations remain non-competitive despite benefiting from, for example, protective tariffs.[63]
However, some argue that SDT can be an effective mechanism to meet the needs of developing countries in trade and even competition rule-making initiatives.[64] This is significant in maritime transport services, particularly for states that seek to leverage on port operations and auxiliary services. But the effectiveness of Sets in this area arguably depends on the strength of the three pillars which support SDT – namely, improved market access, mechanisms to ensure that related WTO rules and disciplines support development, and increased development assistance.[65]
In the context of negotiations on maritime transport services, the emphasis on market access has focused more on access by developed countries to the ports, and by extension the domestic markets of developing economies. Indeed, Art. IV of GATS may have enabled developing countries to have access to technology and information networks for purposes of improving their commitments towards maritime transport services. But the real test of the Art. IV may be whether the domestic services capacity of developing countries have been strengthened, and made more efficient and competitive as a result thereof. From the text of the Art. IV, it is arguable that the goal is to strengthen domestic services capacity whereas providing access to technology and information networks are instead, some of the many possible measures to facilitate achievement of the goal.[66] Hence, the Doha Ministerial Declaration that all special and differential treatment provisions shall be reviewed with a view to strengthening them and making them more precise, effective and operational[67] is perhaps an indication that developing economies have not been able to optimally benefit from such SDT.
Further, the proposal for a Framework Agreement on SDT and similar objectives by the WTO Committee on Trade and Development are a big step towards consensus in the application of SDT provisions.[68] For the same purpose, Annex C of the Decision Adopted by the General Council on 1 August 2004 sets out recommendations of the Special Session of the Council for Trade in Services.[69] Yet, a close review of the document, which forms the basis of present negotiations on Services, reveals that ‘specific’ recommendations remain general in nature and difficult to measure. For instance, one recommendation stipulates that ‘targeted assistance should be provided with a view to enabling developing countries to participate effectively in the negotiations.’ While at first sight the recommendation is significant and although the word ‘should’ may have better been replaced with ‘shall’ to instil added impetus to the recommendation as envisaged by the Doha Ministerial Declaration, the notions of ‘targeted assistance’ and ‘participate effectively’ are difficult to fully appreciate; for example, what would be sufficient and should the same be measured from the perspective of the recipient developing country or the country providing the targeted assistance?
As noted at the outset of this article, market access is a key issue area on specific commitments under GATS. Although market access is not traditionally linked with SDT, the net effect requires an element of ‘rebalancing’ of WTO rules.[70] For example, greater market access calls for removal of existing special opt-out provisions and exemptions which benefit interest groups in industrialised countries.[71] SDT and market access concerns are especially important for developing countries preferring an export orientation strategy.[72] In the context of maritime transport services, the issue of market access in negotiations is principally two-fold: first, the issue concerns rights of foreign operators to establish their own facilities and supply auxiliary related services for maritime transport in the developing countries; secondly, the issue is on rights of foreign ships to gain access to and use port facilities thereof of developing countries without discrimination.[73] In short, in maritime transport services, the issue of market access appears to relate more to the readiness of developing countries to allow foreign players into their domestic markets.
In contrast, the crux of the Uruguay Round bargain was that developing countries would gain access to the markets of developed countries in crucial areas of their export interest, namely agriculture and textiles/clothing.[74] In exchange developed countries secured commitments in relation to intellectual property matters and services.[75] Inevitably, the notion of ‘single-undertaking’ at that time resulted in developing countries automatically becoming bound by commitments covered by the earlier Tokyo Round codes to which only few developing countries signed up.[76] Effectively, market access issues became inseparable from WTO rules on tariffs, quotas, tariff escalation, subsidies[77] and non-tariff barriers.[78]
Yet, some contend that developing countries have not been the net beneficiary in market access, despite having taken more efforts towards removing non-tariff barriers and reducing tariffs.[79] The Doha round has sought to address the imbalance by allowing GATS negotiations to proceed on a request-offer approach towards securing the desired level of commitments. For completeness, it is necessary to note that different negotiation modalities apply for negotiations on market access issues for agriculture and non-agriculture products which represent crucial areas of export interest to developing countries.
At a macro level it can be seen that market access issues have contrasting focus depending on the subject matter. WTO rules provide developing countries market access for processed, manufactured and certain primary products.[80] But tariffs and non-tariff barriers remain central obstacles to market access.[81] The Doha Round envisages greater market access through significant tariff cuts; and effective SDT can facilitate major gains from industrial trade flows.[82] But recent reports indicate that only incremental progress may be possible in that while developed country tariffs would have decreased under a new proposal, key products of export interest to developing countries would have continued to face significant import duties.[83]
Perhaps, through effective technical assistance and capacity building measures for purposes of balancing needs and interest between maritime transport services and agricultural and non-agricultural product related issues, developing countries can optimise benefits gained from flexibilities in disciplines, obligations, thresholds, and transition periods.[84]
A closer analysis of market access issues in the negotiations on maritime transport services shows that the focus is closely linked with the ‘national treatment’ principle under Article XVII of GATS, in the sense that once a developed country is allowed to supply the relevant services in a developing country, there should be no discrimination between foreign and local companies. In view of this, the rationale for scheduling commitments on the third pillar i.e. access to and use of port facilities under Article XVIII (i.e. ‘additional commitments’) of GATS instead of under Article XVI (i.e. ‘Market Access’) is not immediately clear. One argument has been that such division allows for a distinction between ‘pure’ maritime transport services and related services necessary for performing an international maritime transport movement.[85] In reality, however, Members have acknowledged that ‘access to and use of port services’ has remained subject to many restrictions.[86] Indeed, negotiations on this third pillar has focused on ensuring that Members allow international maritime transport services suppliers access to and use of port services on reasonable and non-discriminatory terms and conditions. Thus, if the issue does not involve foreign services suppliers setting up a local presence, it may be appropriate to schedule commitments on the third pillar under ‘additional commitments’. Conversely, however, if developing countries are faced with the prospect of having to allow foreign services suppliers to set up base locally, then it is arguable that commitments on the third pillar should fall within the purview of ‘market access’.
Nevertheless, the issue of ‘non-discrimination’ has to be seen in the context of Article II of GATS which deals with the ‘most favoured nation’ principle. The MFN provision is a broad-based principle which calls for a Member country to provide every other Member country treatment which is no less favourable than that accorded to like services and services suppliers of any other country.[87] Thus, the ‘many restrictions’ on access to and use of port services experienced by Members may be due to the fact that Article II allows for exemptions, hence effectively allowing discrimination. In principle however, the permitted exemptions pursuant to Article II are subject to review. But the 1996 decision to suspend negotiations on maritime transport services included in particular the decision that the Article II will not apply to maritime transport services until the negotiations are completed. Thus, even when negotiations resumed in year 2000, Members remained assumed to be discriminating. Any review of the exemptions under Article II can really only take place post completion of the Doha Round negotiations on GATS. Even so, it cannot be conclusively said that the exemptions would cease upon completion of the negotiations as, in principle, an exemption may effectively last not more than 10 years.[88]
The inherent difficulties with the notions of ‘market access’ and ‘special and differential treatment’ make it increasingly difficult to secure Members desired commitments on maritime transport services. The request-offer approach, the hallmark of the GATS negotiation method in the Doha Round has arguably enabled developing countries to have a stronger footing in negotiations. But such negotiation method which started out on a bilateral basis, which would enable each developing country to negotiate on its own terms, was taken over by request-offer negotiations that were pursued more on a plurilateral basis post 2005 Hong Kong Ministerial Conference. Of course, this has encouraged developing countries to form groups that may enable them to collectively have a stronger footing by enabling the group, rather than an individual country, to champion a set of common concerns. Whether this has hastened the process for securing desired commitments or otherwise stifled the negotiations process remains moot. What is clear however, eight years on since negotiations on Services resumed in 2000, the end cannot conclusively be said to be in sight.
The 2008 ‘July Package’ brought results which gave rise to optimism that the Services negotiations can be completed by end of 2008. The report from the Chairman of the Council for Trade in Services was accompanied by an Annex which, in the words of the report, ‘was considered by Members as providing the elements required for completion of the services negotiations.’[89]
However, scrutiny of the report suggests that any optimism may be short-lived. Granted, the request-offer approach towards securing commitments remains the preferred method of negotiations. But the latest negotiation text shows that the proposed dates for revised offers and final draft schedules remain in square brackets[90] – which in negotiating terms mean that the issue remains open. Indeed, the Chairman’s report stipulates that the dates are subject to further confirmation in the light of the overall calendar for the Doha Development Agenda. Next, while Members agreed that the draft text incorporate a statement that a waiver mechanism was necessary for preferential treatment to be accorded to the least developed countries, the understanding reached in the 2008 July Package shows that the granting of such waiver would not be so straight forward. In particular, Members insisted that the impact of such a mechanism on other developing countries be taken into account in negotiating the principles and characteristics of such a waiver. But perhaps most glaring is the position of four Members, all of whom are from developing countries, in objecting with the formulation of the text to the 2008 July Package. These Members insisted that their position be formally registered in the Chairman’s report as well as the Annex which accompanied the report. The impact of their position can be seen from the following text.
There is no consensus on a new text on services. Various delegations consider that there is no mandate to agree on the elements that go beyond the points agreed by all Members in the Hong Kong Ministerial Declaration and that there is no obligation to make commitments at the highest possible level. Any language that modifies Members’ current obligations has no binding force. However, there is total agreement on immediate implementation of any treatment in favour of the least developed countries and the small and vulnerable economies.[91]
Although it is necessary to point out that the quoted text was not discussed by other delegations at the Special Session,[92] it has to be remembered that the final text on Services can only be carried through by consensus. The position of the four Members clearly indicates that there is currently no consensus; but in suggesting that any favourable treatment should also be extended to small and vulnerable economies, thus arguably opening up a new category of developing country, pre-supposes that it may be sometime yet before consensus can be achieved. While special attention for least developed countries is not something new, the growing emphasis on ‘small and vulnerable economies’ may be attributed, as recently as, to the negotiating mandate achieved through the 2005 Hong Kong Ministerial Declaration.[93] Indeed, in the 2008 July Package, it was reiterated that liberalisation of small economies shall be in accordance with their development needs.[94]
Notwithstanding the position of the four Members, the annex accompanying the Chairman’s report apparently contains elements required for completion of the services negotiations. But aspects of these elements merit scrutiny to assess their impact on commitments for maritime transport services.
When negotiations on Services resumed in 2000, the notion of ‘single-undertaking’ meant that commitments in the already difficult area of maritime transport services could no longer be secured independent of other areas of Services. The annex provides that commitments shall commensurate with the levels of development, regulatory capacity and national policy objectives of individual developing countries.[95] Yet, the annex contained a general reiteration that has significant impact on negotiations towards maritime transport services – ‘there shall be no a priori exclusion of any service sector or mode of supply.’ Such a statement places the issue of cabotage – a subject matter that hitherto has been jealously guarded by Members, particularly developing countries, at risk. Hence, it remains to be seen whether such an issue can be overcome through the targeted technical assistance envisaged in the recommendations stipulated in the annex to the Chairman’s report. Indeed, targeted technical assistance remains a crucial test for success of the negotiations on maritime transport services in the Doha Round, in as much as targeted technical assistance remains a key enabler for developing countries to participate effectively in the world economy. And towards that end, pursuant to the Chairman’s Report on the 2008 July Package, the WTO Secretariat was requested to provide a comprehensive report of technical assistance activities carried out since the Hong Kong Ministerial Conference, in consultation with Members.[96] Developing countries should therefore take such opportunity to reflect their true state of readiness, mindful that equal attention will be paid towards understanding causes for non-readiness.
There is no denying that maritime transport services remain the most economical and reliable mode of transporting merchandise goods internationally over long distances. This should augur well for developing countries which account for a substantial portion of movement of world trade. But whether these countries can move up the ladder of development depends significantly on their ability to effectively facilitate trade. Excessive transaction costs, uncertainty and delays are key factors that would hamper the competitiveness of developing countries in facilitating international trade. If these factors are left unchecked, not only would developing countries face difficulties in attracting trade and trade related activities into their economy, but in turn also these developing economies would not be able to benefit from the ‘new geography of trade’ which thrives on increased exports of manufactured goods and more trade among South-South nations.[97]
However, changing production and trade patterns suggest that developing countries will need to do more to effectively benefit from the global supply chains. While trade facilitation remains a pre-requisite, transport facilitation remains a fundamental distinct criterion for developing countries to benefit from international trade. Closely linked with transport facilitation is the need for efficient logistics services. In this context, it is important to note, for instance, that containerisation significantly facilitates multimodal door-to-door transport services.[98] Particularly for landlocked developing countries, efficient land based modes of transportation are therefore key for these countries to benefit from the full spectrum of containerisation transport services. Thus, inadequate or otherwise inefficient land based modes of transportation perhaps explains why many landlocked states are still served by non-containerised transport services.[99]
This brings into focus a first key issue for developing countries – namely port services.[100] For non-landlocked developing countries, efficient port services can compensate for non-integrated land based modes of transportation. For instance, such developing countries may instead focus efforts towards being a transshipment hub as opposed to a full service port where an efficient multimodal transport is pivotal. But providing efficient port services is a tall order for developing countries. To begin with sound port infrastructure is necessary. Consequently, high capital expenditure would be required. Thus, in developing countries it is not unusual for ports to be managed and developed by state enterprises as opposed to ports being driven largely or purely by the private sector. However, some developing countries, in particular transition economies through privatisation and deregulation have allowed private port operators to supply many port services. But port infrastructure is noted to be both costly and dependent upon careful strategic planning.[101]
As a transport node, ports need to be connected to transport networks at the national, regional and international levels for there to be clear returns on investment in port infrastructure. Unless ports are integrated into these transport networks, trade volumes will not only be difficult to grow but may evidently decline with competition from more efficient transportation networks. Towards that end it is imperative that the status of domestic shipping, i.e. cabotage be resolved as soon as possible. The Guidelines and Procedures for the Negotiations on Trade in Services implies that cabotage should be included.[102] But the 1996 Council Decision referred only to ‘international maritime transport’[103] – and pertinent to recall, both versions of the Maritime Model Schedules explicitly exclude cabotage.
A second issue for developing countries, closely linked with the first issue, is the impact on maritime transport services from growing momentum towards multimodal transport services.[104] Problems on the meaning and scope of ‘multimodal transport’ have clearly hampered negotiations on this item. Such definitional problems have made it practically impossible at this stage to secure scheduled commitments on market access or national treatment. Even so, if developing nations decide to make commitments on multimodal transport, perhaps a finer problem for these countries will be to determine whether such commitments on say, road and rail transport, should be entered under the maritime transport services subsector as opposed to scheduling these services independently under rail and road transport services subsectors – the implications of one over the other will have to be properly understood and evaluated. In this process, progressive liberalisation on multimodal transport services may be acceptable if developing countries can play a meaningful role. For instance, if local transport service providers have created a niche for themselves in the local market, partial liberalisation may be a way forward towards the desired end. Indeed, in partially liberalising, local service providers may acquire technical knowledge and expertise that would otherwise not be possible if the foreign counterparts were not allowed in to local markets. In the long run, the local players may reach a certain level where it would no longer be competitive for foreign service providers to operate locally.
The growing trend to link logistics services with the notion of multimodal transport is a third key issue and one which clearly indicates that ports are integral to the logistics chain. However, trade transaction costs faced by developing countries show that transport and logistics services in developing countries cannot compete with nations able to provide state-of-the art services.[105] The gap ranges from infrastructure and information and communication technology requirements, technical know-how to current commercial practices. Therefore, for the majority of developing nations, logistics services are still very much in the infancy stage. Bridging the gap may require intervention at all levels but any such intervention should seek a careful balance between the needs of developing countries and gains thereof, from relaxing various access rules, promoting more efficient and effective methods of doing business and through leveraging on business partners to penetrate non-traditional markets.
Access to and use of port facilities perhaps remains the most pivotal pillar in contemporary negotiations on maritime transport services. In this sense, other immediate challenges for non-landlocked developing countries relate principally, in certain cases, from upgrading infrastructure to the provision of longer berth lengths, wider ship turning circles and deeper access channels alongside berths for modern ships. In addition, for transition economies in particular and for those that have invested in heavily in port operations, managing ports’ superstructure has also become more sophisticated and demanding. Thus, securing enhanced technical assistance and long-term capacity building will be crucial for transition economies to meet these other immediate challenges in respect of maritime transport services.
The bleak outlook of the global economy is likely to push back completion of the Doha Agenda.[106]
The economic health of developing nations which traditionally depend upon external demand may require a shift in focus to stimulate domestic consumption. For maritime transport services, this can mean greater attention towards cabotage policy, thus once again placing in doubt the issue of domestic shipping vis negotiations on maritime transport services. In addition, as all nations seek to conserve their resources, this can also mean lesser resources allocated for targeted technical assistance and capacity building. The growing emphasis on multimodal transport and logistics services has resulted in negotiations on maritime transport services becoming increasingly complex. As such, the ability of developing countries to be competitive in the area of maritime transport services cannot be left to time alone. At the same time, developing nations themselves may wish to explore new policy initiatives or at least revisit existing ones. Revisiting existing policy initiatives may entail a shift in focus. Such shift should of course not usurp any limited resources but instead be pursued with a view of optimising economic potential. Having a new perspective may also enable developing countries to re-evaluate the type and scope of SDT that would be required and ultimately allow for better quality offer’s to be made.
Towards that end, in light of the earlier analysis in this article, a diverse range of policy initiatives may be considered by developing countries in order to be more competitive in the area of maritime transport services. What follows is by no means an exhaustive list and in certain respects similar to ideas and initiatives promoted by organisations like UNCTAD and WTO, to mention a few. More importantly, it is necessary to appreciate that there is no single formula that can be applied to all developing countries. As such, the following sample policy options and considerations may be applied with modification to suit unique circumstances of a particular developing country.
1. Developing countries may wish to consider commercial ventures with an appropriate stake for instance in areas of port operations and logistics. These ventures may initially take the form of a majority stake by the developing country. With appropriate timelines in order to enable the investing foreign party to project its returns, such stake may be diluted where necessary, enhanced or where viable and appropriate the stake of the foreign party may even be bought over. Either way, measurable outputs must be in place to ensure that such commercial ventures in the process effectively transfer knowledge, skills and expertise to the developing country;
2. Developing countries should publicise measures it has taken to reduce non-trade barriers and efforts it has made towards creating an investor friendly environment. On a broader plane, these efforts are necessary towards enhancing foreign direct investment as well as towards attracting both service providers and users to the developing country;
3. Outsourcing may be an option for developing countries wishing or perhaps needing to channel limited resources to other specific areas of their economy. In maritime transport services, given relatively lower levels of technology components, auxiliary services may be a suitable area for developing countries to experiment with outsourcing;
4. Due to geographical location of certain ports, shipping lines may have a commercially viable choice between neighbouring ports. In such cases, governments of developing countries may wish to review appropriate existing policies in relation to its port operations and make or otherwise enable the policies to be non-discriminatory. The government may also facilitate opportunities for the private sector to be a full fledged port operator. Such changes in policy have proven effective in attracting shipping lines from competing ports. A case in point is the success stories in the operations of the Port of Tanjung Pelepas, Malaysia;
5. The logistics industry, particularly for maritime transport services, can be asset-based and non-asset based. In view of this, developing countries can choose to differentiate themselves by identifying niche areas where their resources can be optimised;
6. The request-offer approach is key in negotiations on Services in the Doha Development Round. Market access requests from developed countries may be broad-based in nature and not always specific. Therefore, where the request is more general in nature, developing countries may wish to identify areas in which they can offer business opportunities at competitive rates and in the process enable themselves to make valuable offers to facilitate market access requests. Of course, the issue of market access goes both ways and as such the offer from developing countries may, in appropriate circumstances, be on condition of reciprocity;
7. There is no contention that technical assistance and capacity building are key enablers for developing countries to integrate into the global economy. Thus, in the context of the complex area of maritime transport services developing nations should seek technical assistance and capacity building to be targeted at different levels ranging from ensuring that developing nations have a clear understanding of the scope of coverage of issues in negotiations on maritime transport services up to the level of equipping developing countries’ capabilities of being self-sufficient in providing the various types of services;
8. Investments in certain aspects of maritime transport services, like port operations, can be costly and the returns visible only over the longer-term. Faced with huge expenditures and considerable uncertainty, developing countries should ensure in place complementary measures to mitigate potential negative effects of adjustment costs associated with trade liberalisation;
9. One way to liberalise aspects of maritime transport services is for developing countries to allow foreign services providers to set up operations locally. While developing countries may generally be averse to such policy option, their governments may first wish to evaluate the linkage between commercial presence and foreign direct investment and in turn assess the impact on commercial interests and business opportunities that may be generated thereof. Further, foreign service providers would normally pay various forms of tax which can be supplemented with a variety of policy incentives calculated to promote the long-term interests of developing economies; and
10. Towards enabling better quality offers to be made by developing countries for services in general and maritime transport services in particular, their governments may wish to consider exploring linkages that may exist between issues in trade facilitation negotiations and transport and liberalisation of logistics services.
The disparate needs of developing nations compound the difficulties in securing commitments in the complex area of maritime transport services. As a framework for multilateral trade WTO rules have to strike a balance between the needs of all its Members which include developed countries. The vast scope of maritime transport services and its intricate issues require a deep understanding of the negotiating modalities and different implications of WTO rules. It appears clear that the issue of maritime transport services cannot be considered in isolation from other WTO subject areas, for example, trade in goods. At the same time, growing attention towards the subject of multimodal transport, an additional area to the original scope of maritime transport services, cannot be ignored. Likewise, the implications of multimodal transport on domestic shipping or cabotage remain unclear. And while negotiating modalities on maritime transport services clearly exclude cabotage, attempts to include the topic on the negotiation agenda remain real. As such, enlargement of the already multifaceted original scope of maritime transport services has made negotiations more intricate and difficult. The short to medium term global economic uncertainty may also adversely impact on-going initiatives towards integrating developing nations into the global economy.
Nevertheless, the followings findings can be made from the brief analysis on maritime transport services in this paper. First, there is no single notion of developing country in view that the vast majority of developing nations is at different levels of development and therefore requires different forms of attention and assistance. Secondly, the scope of maritime transport services, particularly for negotiations, is not entirely clear with differences existing between the 1993 and 1996 Maritime Model Schedules. Similarly, the governing WTO document for structuring commitments in maritime transport services, the W/120 classification list, also contains differences from both Maritime Model Schedules. Hence, the complexity and multiplicity of documents add confusion and poses difficulty for developing nations to negotiate effectively. Thirdly, Special and Differential Treatment and Market Access provisions permeate WTO rules and thus remain a primary mechanism to meet the needs developing countries’. But only clarity in their application and purpose of use can help best meet the needs of developing countries. The provision on market access in the General Agreement on Trade in Services is broad based in nature. In particular, as noted, the focus on market access in maritime transport services and its associated problems are quite distinct from the issue of market access in general. While the former concerns access to the domestic markets of developing countries, the latter seeks to address issues faced by developing countries in accessing domestic markets of developed nations. And, it cannot be denied that market access issues are inseparable from WTO rules on, inter alia, tariffs, quotas and subsidies, all of which impact the needs of developing countries. Fourthly, clarity in the WTO rules alone cannot help meet the needs of developing countries. Thus, developing nations will need to capitalise on the special and differential treatment through effective targeted technical assistance. And such special and differential treatment may only be meaningful if the targeted technical assistance and capacity building are provided in a timely, comprehensive and effective manner. The process of transfer of know-how and technology – which in itself may entail partial liberalisation in maritime transport services - is an aspect of capacity building that has to be structured and nurtured so as to ensure that developing nations would be able to ultimately independently operate competitively. Towards that end, there is a need to build on the significant milestones achieved through the 2005 Hong Kong Ministerial Declaration and not dilute its impact in subsequent WTO related texts.
Fifthly, while key contemporary issues in maritime transport services faced by developing nations centre on port operations and services, proponents of maritime transport liberalisation must take cognisance that for a substantial number of developing nations, there will be competing demands for public funds. Thus, although access to and use of port facilities may remain a pillar in negotiations on maritime transport services the extensive amount of funding required for port investment may not outweigh the competing and in some cases, immediate needs of the population for public goods such housing and hospitals. Further, the socio-economic implications on developing countries in providing value added services that go beyond the traditional cargo-handling functions will have to be carefully appreciated. Thus, developing nations may take quite a while to have in place state of the art facilities in port operations hitherto the activities are generally labour-intensive in nature. Through technical assistance and capacity building labour intensive jobs can be moved out of the port into manufacturing goods for exports. Sixthly, although it is difficult to expect developing countries to be at par in the near future with developed countries in providing maritime transport services, a range of policy options remain open to developing nations towards liberalisation of this sector. The choice may not always be easy or straightforward but with targeted technical assistance, developing nations can be placed in a better position to decide on suitable policies that would meet their WTO obligations while at the same time not compromise their levels of development and state of readiness.
When negotiations on maritime transport services, which were suspended in 1996 resumed in 2000, an ambitious approach was taken to adopt a single undertaking for WTO commitments on the whole area of Services. A breakthrough was achieved through the 2005 Hong Kong Ministerial Declaration. And while significant progress has been made resulting in the 2008 July Package, it may remain sometime yet before developing nations can all fulfil their WTO obligations on maritime transport services. Thus, on balance it may be safe to state that existing WTO rules partially meet the needs of developing countries. But clearer implementation of WTO rules and comprehensive targeted technical assistance are required in order to meet the disparate needs of developing nations, without which, it is likely that the embargo on Article II of the General Agreement on Trade in Services will remain in place for some time yet, and all WTO Members will continue to be deemed to be discriminating, thus defeating goals towards trade liberalisation.
[1] LLB(Hons), MA(Dist), LLM(Dist), ACIArb, Barrister.Until recently, Rizal was a Research Fellow at the Maritime Institute of Malaysia. He is now pursuing Doctoral studies at the University of Sydney, Australia under a University of Sydney World Scholars scholarship and a Khazanah Global Scholarship, Malaysia. He can be reached at rizal.abdulkadir@gmail.com.
[2] United Nations Conference on Trade and Development, ‘Negotiations on Transport and Logistics and Services: Issues to Consider’ (UNCTAD/SCTE/TLB/2005/3) 2006, 21, United Nations Conference on Trade and Development website <http://www.unctad.org/en/docs/sdtetlb20053_en. pdf> at 31 January 2009.
[3] World Trade Organization, ‘Developing, transition economies cushion trade slow down’ (Press Release, 17 April 2008), World Trade Organization website <www.wto.org/ english/news_e/pres08_e/pr520_e.htm> at 31 January 2009 See also United Nations Conference on Trade and Development, Handbook of Statistics (2008) United Nations Conference on Trade and Development website <http:// stats.unctad.org/Handbook/TableViewer/tableView.aspx?ReportId=1902> at 31 January 2009.
[4] United Nations Conference on Trade and Development, above n 1.
[5] World Trade Organization, ‘Guidelines and Procedures for the Negotiations on Trade in Services’, (S/L/93) adopted by the Special Session of the Council for Trade in Services on 28 March 2001. The negotiating proposal takes the form of requests from a World Trade Organization Member. This request is then sent directly to another Member indicating what improvements are being sought for service suppliers and services to be rendered. In turn, a Member(s) then puts forward an ‘offer’ which specifies how and to what extent they are willing to make binding commitments in response to the requests. Typically, the ‘offer’ triggers negotiations on a bilateral or plurilateral basis. The important point to note for present purposes is that a ‘request’ is not provided to the WTO Secretariat whereas an ‘offer’ is circulated to all Members as a WTO document. Ultimately, final offers become legally binding commitments specifying the conditions under which trade in services is granted.
[6] For further explanation of the type of conferences, see World Trade Organization Council for Trade in Services, ‘Maritime Transport Services Background Note by the Secretariat’ (S/C/W/62) 16 November 1998.
[7] Ibid. See also World Trade Organization, ‘Singapore Ministerial Meeting – Maritime Transport Press Media Briefs’ (1996) <www.wto.org/english/thewto_e/minist_e/ min96_e/maritime.htm> at 31 January 2009.
[8] World Trade Organization Council for Trade in Services, above n 5, [47]. See also Benjamin Parameswaran, The Liberalization of Maritime Transport Services – With Special Reference to the WTO/GATS Framework (2004) 341.
[9] World Trade Organization, Uruguay Round - Group of Negotiations on Services - Services Sectoral Classification List – Note by the Secretariat, (MTN.GNS/W/120) <http:// docsonline.wto.org> at 9 March 2009.
[10] World Trade Organization, above n 2.
[11] United Nations Conference on Trade and Development, above n 1.
[12] World Trade Organization, Council on Trade in Services Special Session, Joint Statement on the Negotiations on Maritime Transport Services, (TN/S/W/11) 3 March 2003.
[13] United Nations Conference on Trade and Development, ‘Negotiations on Transport and Logistics and Services’ n1 above. The Logistics Services Checklist, which serves as a guide for negotiations on logistics services, makes no reference to the concept of multimodal transport per se and such silence includes no mention on the scope and extent of relevant commitments that would be expected from Members on market access and national treatment issues. See also Parameswaran, above n 7, 343.
[14] Ibid 12. See also Parameswaran, above n 7, 60-61.
[15] For example, see World Trade Organization Council for Trade in Services Special Session, ‘Communication from Australia – Negotiating Proposal for Maritime Transport Services’ (S/CSS/W/111) 1 October 2001.
[16] United Nations Conference on Trade and Development, above n 1, 5.
[17] World Trade Organization, ‘Services Sectoral Classification List – Note by the Secretariat’ (MTN.GNS/W/120) 10 July 1991. See also United Nations Conference on Trade and Development, above n 1, 10.
[18] Ibid.
[19] United Nations Conference on Trade and Development, above n 1, 2.
[20] Convention on a Code of Conduct for Liner Conferences, opened for signature 1 July 1974, Vol 1334 UNTS, art 49(1) (entered into force 6 October 1983). Ibid.
[21] Anon, ‘Ports and Maritime Transport in West and Central Africa’ (2008) 3(4) World Bank Research Digest 5.
[22] World Trade Organization, above n 2.
[23] Ibid.
[24] Ibid.
[25] Anon, above n 20.
[26] World Bank, Global Economic Prospects 2004 – Realizing the Development Promise of the Doha Agenda (2003) 206.
[27] The 32 World Trade Organization members designated as least-developed counties are listed at World Trade Organization website<www.wto.org/english/thewto_e/ whatis_e/tif_e/org7_e.htm> at 31 January 2009.
[28] United Nations Conference on Trade and Development, Transit Systems of Landlocked and Transit Developing Countries: Recent Developments and Proposals for Future Action (2001).
[29] Ibid 11-15.
[30] Ibid Ch II-III. See also Barbara Stallings, Globalization and Liberalisation: The Impact on Developing Countries (2001) United Nations, Ch II-IV.
[31] United Nations Conference on Trade and Development, World Trade Organization Accessions and Development Policies (DITC/TNCD/11) 2001.
[32] World Trade Organization, ‘Work on special and differential provisions’ <http://www.wto/english/tratop_e/devel_e/dev_ special_differential_provisions_e.htm#legal_provis-ions> at 31 January 2009.
[33] World Trade Organization, ‘Understanding the World Trade Organization’ <http://www.wto.org/english/thewto_e/ whatis_e/tif_e/utw_chap6_e.pdf> at 31 January 2009. See also World Trade Organization, Decision on Measures in Favour of Least-Developed Countries (LT/UR/D-1/3) 1994.
[34] World Trade Organization, ‘Who are the developing countries in the WTO?’ <http://www.wto.org/english/ tratop_e/devel_e/d1who_e.htm> at 31 January 2009.
[35] United Nations Conference on Trade and Development, Preparing for Future Multilateral Trade Negotiations: Issues and Research Needs from a Development Perspective (123,ITCD/TSB/6) 1999.
[36] See, eg, World Trade Organization, LDC Trade Ministers Meeting-Zanzibar, Tanzania 22-24 July 2001(WT/L/409); Joseph Stiglitz, ‘Two Principles for the Next Round, or How to Bring Developing Countries in From the Cold’ (2000) 23 World Economy 437, 451-452; B Hoekman, R Chadha, W Martin, A Oyejide, M Pangestu, D Tussie and J Zarrouk, ‘Developing Countries and the Next Round of WTO Negotiations’ (2000) 23 World Economy 431, 435-436; Surya P Subedi, ‘The Road from Doha: The Issues for the Development Round of the WTO and the Future of International Trade’ (2003) 52 International Comparative Law Quarterly 425, 430-431, 444-445.
[37] For difficulties with the notion of ‘like product’ contrary to art I and III of GATT 1994 see, eg, Indonesia Certain Measures Affecting the Automobile Industry (WT/DS54/ 55/59/64/R) (1998).
[38] Joseph Stiglitz and Andrew Charlton, ‘Development-friendly Prioritisation of Doha Round Proposals’ (2005) 28 World Economy 293; Kamal Malhotra, ‘Will a Trade and Investment Link in the Global Trade Regime Be Good for Human Development?’ (2004) 16 European Journal of Development Research 716; E H Preeg, ‘Reactions to Seattle: The South Rises in Seattle’ (2000) 3 Journal of International Economic Law 183 and Robert Wolfe, ‘Crossing the River by Feeling the Stones: Where the WTO is Going after Seattle, Doha and Cancun’ (2004) 11 Review of International Political Economy 574.
[39] World Bank, above n 25, 65-72.
[40] Concern over agriculture issues was said to have caused the collapse at Cancun, see, eg, Joseph Stiglitz and Andrew Charlton, above n 37.
[41] World Trade Organization, above n 11.
[42] World Trade Organization, Council for Trade in Services, Decision on Maritime Transport Services (S/L/24) 3 July 1996.
[43] Ibid. Maritime Transport Services – Background Note by the Secretariat 1998, WTO Doc, S/C/W/62 at 10-18 which provides an analysis of the Commitments and indicates, among others, that as of 1998, 29 WTO Members gave commitments in international shipping services, 26 gave scheduled commitments in services auxiliary to maritime transport and six Members undertook commitments on port services.
[44] For further information regarding the World Trade Organization’s negotiations process, refer to its document series TN/S/O and TN/S/O rev 1. See also remarks in the World Trade Organization’s 1996 annual report concerning the issue of negotiations and commitments in maritime transport services, available at <http://www.wto.org/english/ tratop_e/serv_e/transport_e/transport_maritime_urneg_e. htm> at 31 January 2009. For a sample analysis of commitments in maritime transport services see above n 42, and for a more recent assessment, see Maritime Transport Services – Background Note by the Secretariat, (S/CSS/W/106) 2001 <http://docsonline.wto.org> at 9 March 2009.
[45] World Trade Organization, ‘Summary table of ongoing accessions’ July 2008 at World Bank Organization website <www.wto.org/english/thewto_e/acc_e/status_e.htm> at 31 January 2009
[46] World Trade Organization, ‘Understanding the World Trade Organization: Developing Countries’ at World Trade Organization website <http://www.wto.org/english/thewto_e/ whatis_e/tif_e/dev1_e.htm> at 31 January 2009.
[47] World Trade Organization, above n 32. See also Decision on Measures in Favour of Least-Developed Countries (LT/UR/D-1/3) 1994.
[48] See General Agreement on Tariffs and Trade 1947/1994 art XXXVI:1(f). Understandings reached through General Agreement on Tariff and Trade 1994, 1(c)(i)-(vi) have a direct impact on such principles, objectives and commitments.
[49] Susan Prowse, ‘The Role of International and National Agencies in Trade-related Capacity Building’ (2002) 25 World Economy 1235, 1245 and Hunter Nottage, ‘Trade and Competition in the WTO: Pondering the Applicability of Special and Differential Treatment’ (2003) 6 Journal of International Economic Law (23, 28, 31 stipulating there are no fewer than 145 SDT provisions).
[50] Doha Briefing Series 3(13) 13 December 2004.
[51] Ibid. See also art 15.1 Agreement on Agriculture; Article 6:6 Agreement on Textiles and Clothing.
[52] Bernard Hoekman, Constantine Michalopoulos and L Alan Winter, ‘Special and Differential Treatment of Developing Countries in the WTO: Moving Forward After Cancun’ (2004) 27 World Economy 481, 483.
[53] This would be done by listing out all the exemptions in an Annex to Article II – these exemptions would then be subject to periodical review with a view to removing the exemptions within a period of time. The full text of the GATS agreement is available at <http://www.wto.org/english/docs_e/legal_e/ legal_e.htm> at 31 January 2009.
[54] Sheila Page, Report on Special and Differential Treatment in post-Cotonou Services Negotiations, Overseas Development Institute. This was an Economic Partnership Agreements (EPAs) between the European Union (EU) and African, Caribbean and Pacific (ACP) countries which extended to services. The agreement provides for applying special and differential treatment (S&D) in services negotiations in order to benefit the ACP and the report discusses how that might be done.
[55] ‘Doha Ministerial Declaration’ (WT/MIN(01)/DEC/1) [4]; ‘Compendium of Issues Related to Regional Trade Agreements’ (TN/RL/W/8/Rev.1); ‘Submission on Regional Trade Agreements – Paper by the African, Caribbean and Pacific Group of States’ (2004) where the detailed proposal sought to incorporate Special and Differential provisions into Article XXIV GATT, (TN/RL/W/155), Section III. See also ‘Turkey – Restrictions on Imports of Textile and Clothing Products’ (1999) (WT/DS34/AB/R) [48], [52] and [58] where the report states clarity in the WTO rules necessitate a standard interpretation of key concepts impacting regional trade agreements such as: ‘substantially all the trade’, ‘other regulation of commerce’; ‘preferential rules of origin’; and clarity is also required in understanding the relation between the various WTO rules on RTAs including GATT Article XXIV and ‘Enabling Clause’. World Bank, Global Economic Prospects 2005 – Trade Regionalism and Development (2005), ch 2.
[56] Robert Wolfe, ‘Regulatory Transparency, Developing Countries and the WTO’ (2003) 2 World Trade Review 157, 158.
[57] World Bank, above n 25, 207.
[58] Robert Hudec, Essays on the Nature of International Trade Law (2000) 318.
[59] Ibid 319-320.
[60] Art 1, Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries 28 November 1979, (L/4903,LT/TR/D/1) but note also arts 2-4.
[61] World Bank, above n 25.
[62] Ibid.
[63] Mari Pangestu, ‘Special and Differential Treatment in the Millennium: Special for Whom and How Different?’ (2000) 23 World Economy 1285, 1289.
[64] Nottage, above n 48.
[65] Bernard Hoekman, ‘More Favourable Treatment of Developing Countries and the Doha Development Agenda’, (Report 26921) 29 May 2003, 1-8.
[66] Art IV General Agreement on Trade in Services: ‘The increasing participation of developing country Members in world trade shall be facilitated through negotiated specific commitments…relating to: (a) the strengthening of their domestic services capacity and its efficiency and competitiveness, inter alia through access to technology on a commercial basis; (b) the improvement of their access to distribution channels and information networks.’
[67] ‘Doha Ministerial Declaration’ above n 54, 44.
[68] World Trade Organization General Council, ‘Preparations for the Fourth Session of the Ministerial Conference – Proposal for a Framework Agreement on Special and Differential Treatment’ (WT/GC/W/442) 19 September 2001. World Trade Organization Committee on Trade and Development, ‘Implementation of Special and Differential Treatment Provisions in WTO Agreements and Decisions’ (WT/COMTD/W/77) 25 October 2000.
[69] World Trade Organization, ‘Doha Work Programme – Decision adopted by the General Council’ (WT/L/579) 1 August 2004.
[70] World Trade Organization Committee on Trade and Development, above n 67.
[71] Ibid.
[72] Pangestu, above n 62, 1290.
[73] World Trade Organization, above n 6.
[74] J Michael Finger, ‘The Uruguay Round North-South Bargain: Will the WTO get over it?’, in Daniel L M Kennedy and James D Southwick, The Political Economy of International Trade Law-Essays in Honour of Robert E. Hudec (2002) 301-310.
[75] Ibid.
[76] Ibid. Relevant commitments covered by the codes include, rules of origin, subsidies and anti-dumping.
[77] A significant issue in itself in relation to agriculture negotiations.
[78] ‘WTO-Market Access: Unfinished Business – Post Uruguay Round Inventory and Issues’, (2001) 1, 1-7 and Section II and III <http://www.wto.org/english/res_e/publications_e/special _studies6_e.htm> at 9 March 2009.
[79] Michael Finger, above n 73, 301-302.
[80] General Agreement on Tariffs and Trade, 994 art XXXVI: 4 and 5.
[81] Sungjoon Cho, ‘A Bridge Too Far: The Fall Of The Fifth WTO Ministerial Conference In Cancun and The Future of Trade Constitution’ (2004) 7 Journal of International Economic Law 219.
[82] Joseph François, Hans van Meijl and Frank van Tongeren, ‘Gauging the WTO Negotiation’s Potential Gains’ (2005) 42 Economic Policy 350, 353.
[83] See ICSTD Analysis – Unpacking Lamy’s July 2008 Farm Trade Package, <http://ictsd.net/i/news/bridges/27719/> at 9 March 2009.
[84] Pangestu, above n 62, 1294-1301. Technical assistance and capacity building can help DCs strengthen their macroeconomic fundamentals, financial, regulatory, institutional, and governance policies. See also Prowse, above n 48, 1237; World Trade Organization, above n 54, [38] which placed technical cooperation and capacity building as core elements of the development dimension.
[85] World Trade Organization Council for Trade in Services, above n 5, 9.
[86] Ibid.
[87] Art II, General Agreement on Trade in Services.
[88] World Trade Organization, ‘General Agreement on Trade in Services: objectives, coverage and disciplines’ para 7 (a) <http://www.wto.org/english/tratop_e/serv_e/gatsqa_e.htm> at 31 January 2009.
[89] World Trade Organization, Chairman of the Council for Trade in Services, ‘Elements Required for the Completion of the Services Negotiations’ (TN/S/34) 2008.
[90] Ibid 3.
[91] Text as registered in the Chairman’s Report, as requested by Bolivia, Cuba, Nicaragua and Venezuela
[92] Ibid.
[93] World Trade Organization, ‘Hong Kong Ministerial Declaration’ (WT/MIN(05)/DEC) 2005 at [26]: ‘Negotiations shall have regard to the size of economies (emphasis added) of individual Members, both overall and in individual sectors.’
[94] World Trade Organization, Chairman of the Council for Trade in Services, above n 88, 3.
[95] Ibid.
[96] Ibid 4.
[97] United Nations Conference on Trade and Development, ‘Review of Maritime Transport’ (2005) 83.
[98] Ibid 84
[99] Ibid.
[100] United Nations Conference on Trade and Development, above n 1, 22.
[101] United Nations Conference on Trade and Development, ‘Port Logistics – Key Issues for Developing Countries’, United Nations Conference on Trade and Development website <http://www.unctad.org> at 31 January 2009.
[102]‘[T]here shall be no a priori exclusion of any service sector or mode of supply.’ World Trade Organization, above n 4.
[103]‘Desiring to further the liberalization of international trade in maritime transport services (emphasis added) within the framework of the General Agreement on Trade in Services’, World Trade Organization, above n 41.
[104]United Nations Conference on Trade and Development, above n 1, 24.
[105]Ibid 15.
[106]See, eg, Anon, Trade Pales Next to Financial Turmoil (2008) 2(5) International Centre for Trade and Sustainable Development and Anon, Global Financial Crisis Focuses Mind on Doha (2008) 12(39) International Centre for Trade and Sustainable Development website <http://www. ictsd.org> at 31 January 2009.
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