CYIL 2013

THE STATE OF PLAY AND FUTURE OF SERVICES NEGOTIATIONS IN THE WTO not led to breakthroughs in solving these key DDA GATS issues, even though the focus on technical work might be conceived as a way to resuscitate the negotiations. 28 2.2.1 Emergency safeguard measures The negotiations on ESM in GATS, based on Article X, highlight a basic divide between those Members eager for more liberalisation and those in favour of more protectionist possibilities. Unsurprisingly, both groups are even divided on the matter whether ESM should be adopted. 29 Three arguments in favour of ESM in services are made: 30 ESM could help the protection of infant industries from foreign competition before these industries become internationally competitive; ESM could partly remedy adjustment costs that result from trade liberalisation – such as temporary unemployment before jobs are recreated in comparatively more advantageous sectors; and the public choice approach, which states that for politicians who fear that the political cost of liberalisation could be higher than their political gains from it, ESMmay limit the political cost of agreeing on more ambitious agreements. Opponents argue that ESM are undesirable as the schedules of commitments already allow sufficient flexibility, and ESM would undermine the stability of existing commitments. 31 They also feel that the lack of precise trade data makes ESM very difficult to preserve, a point that is illustrated by the Report by the Chairperson of the WPGR of 2011, which states that ESM negotiations are still essentially focused on the availability and adequacy of national statistics. 32 Proponents of ESM feel that these data problems are exaggerated. They claim that strict procedural disciplines would prevent the undermining of existing commitments and that ESM would encourage more liberal commitments. 33 In finding that balance, ESM could be valuable bargaining material to persuade Members to liberalise services. 34 As concerns the legal nature of ESM, proposals point towards the inclusion of a relatively straight-forward horizontal article in the GATS, which sets out the general framework and whereby sectoral issues are to be addressed ad hoc by the parties when establishing or attacking safeguard measures. 35 Alternatives are to include 28 S/WPGR/23, Annual Report of the Working Party on GATS Rules to the Council for Trade in Services (Adopted 29 November 2012); TN/S/35, Negotiations on Trade in Services (Report by the Chairman of the Council for Trade in Services 22 March 2010) 35. 29 Jara and Domínguez 117. 30 Juan A. Marchetti and Petros C Mavroidis, ‘What Are the Main Challenges for the GATS Framework? Don’t Talk About Revolution’ (2004) 5 European Business Organization Law Review 511, 540. 31 World Trade Organization, Market Access: Unfinished Business – Post Uruguay Round Inventory (Special Studies N°6, 2001) 119. 32 And on the definition of ‘domestic industry’. See S/WPGR/22, Annual Report of the Working Party on GATS Rules to the Council for Trade in Services (Adopted 10 November 2011) 3. 33 World Trade Organization, Market Access: Unfinished Business – Post Uruguay Round Inventory 119. 34 Gilles Gauthier, Erin O‘Brien and Susan Spencer, ‘Déjà Vu, or New Beginning for Safeguards and Subsidies Rules in Services Trade?’ in Pierre Sauvé and Robert M. Stern (eds), GATS 2000: New Directions in Services Trade Liberalization (The Brookings Institution 2000) 176. 35 Mario Marconini, Emergency Safeguard Measures in the GATS: Beyond Feasible and Desirable (United Nations Conference on Trade and Development 2005) 27. Such a proposal was tabled by the