DEFEND PHILIPPINE INTERESTS: REJECT ANNEX C ON GATS

AN APPEAL TO THE PHILIPPINE TRADE NEGOTIATORS

Dear Secretary Peter Favila,

As you are aware, Annex C of the services text has come in for severe criticism from several developing countries. On 15 December 2005, Philippines signed, alongwith South Africa, Indonesia, and Venezuela, a letter expressing the view that Annex C cannot be part of the final Ministerial declaration. The G90 has also submitted an alternative text. Both these developments have been severely criticized by countries with aggressive interests on services such as US, EU, Switzerland, Japan, Australia and India. As we write this there are reports that green rooms are being held and countries opposing Annex C are being kept out of it.

We denounce the green rooms that are undemocratic and are unrepresentative of crucial dissenting voices.

There are several reasons for the Philippines to reject Annex C outright. The principal one is that it changes the rules in the midst of the game. Developing countries agreed to the GATS because of its flexible nature and this text contains language that completely reverses this mechanism. We do not understand how far-reaching plurilateral and sectoral negotiations can be launched when countries are nowhere near agreement on multilateral rules on crucial areas such as Emergency Safeguard Mechanisms, Subsidies and Domestic regulation.

Reports indicate that sectors such as finance, telecommunications, energy, distribution, water, education and health will be particularly targeted in sectoral negotiations in 2006. Further, countries will use the language in the modal section with export interests to demand mandatory qualitative and quantitative targets for services liberalisation. Finally the text mentions that countries should look at a possible framework for liberalising government procurement, an issue that was rejected by virtually the entire developing country membership as part of the Singapore issues in the 2003 Cancun Ministerial.

The Philippine government has stated time and again that the preservation of policy space is a primordial concern guiding our stance in these Doha Round negotiations. On services in particular, we take this to mean the preservation of the flexibilities that are inherent in the request and offers process. The concerns that you've raised over the plurilateral approach and demands for qualitative targets, particularly on commercial presence and foreign equity restrictions are very crucial for they strike at the heart of the flexibilities that you have vowed to protect and preserve.

There is nothing in this disastrous text for Philippine and other developing countries. We urge you to reject this text unconditionally and join hands with other developing countries such as Cuba and Venezuela that are calling for the same. This Ministerial Conference offers you an opportunity to stand up for the Philippine people and for solidarity the South.

Sincerely,

Philippine groups in Hong Kong