Liberalisation of Trade in Services (LOTIS) Committee

Minutes of meeting, Tuesday, 13 June 2019 at PricewaterhouseCoopers, 1 Embankment Place, London WC2N 6NN

Present:

Chair

Christopher Roberts, Covington and Burling

Secretary

Neil Jaggers, BI

Alec Berry, DTI (Trade Policy Directorate)

Graham Bartlett, DTI

Christopher Crozier, Morgan Stanley Dean Witter

Alastair Evans, Lloyd’s

Mark Hatcher, PricewaterhouseCoopers

Tim Kidd, Bank of England

Nick Lowe, International Underwriting Association

Martin Manuzi, Institute of Chartered Accountants

Malcolm McKinnon, DTI

Julie Patterson, AUTIF

Tim Reardon, Chamber of Shipping

John Thirlwell, British Bankers Association

Dr Ian Williams, Prudential Corporation

Apologies

Anthony Belchambers (The Futures & Options Association), Mark Brownrigg (Chamber of Shipping), John Cooke (ABI), Roger Davis (PricewaterhouseCoopers), Robin Griffith (Clifford Chance), June O’Keeffe (Law Society), Ian Kemsley (HM Treasury), James Kariuki (FCO), Henry Manisty (Reuters Holdings plc), Victoria Powell (FSA), Lisa Rabbe (Goldman Sachs Int.), Sir Adam Ridley (LIBA), Gavin Robert/Philip Marsden (Linklaters and Alliance), David Wood (CBI)

  1. The Minutes of the meeting on 21st March 2000 were approved.

Matters Arising were taken up during the course of the meeting.

    1. Electronic Commerce. The Chairman welcomed Alec Berry, the head of the branch in the DTI dealing with Trade Policy issues of E-Commerce and highlighted three matters by way of introduction.

      (i) The debate on re-launching the work programme on E-Commerce in the WTO continued. It required a decision by the General Council which should come towards the end of July. Part of the debate was about whether to set up a new horizontal group to study issues across the whole range of WTO interests. The priority as he saw it was to settle the procedural debate quickly so as to get on with the practical work.

(ii) The EU position on clusters was not far apart from the one promoted by AOL.

(iii) The ESF position was as set out in the final revised version of Doug Gregory’s paper. Since this had only been circulated just before the meeting, he pointed out where changes had been made to the draft of 25th May. There had been a protracted debate on the paper at the ESF meeting on 8th June largely on how to deal with audio visual interests, but the end result was a paper little changed from the earlier version. The main change was to take out material on domestic regulation and leave such issues to be covered in a separate ESF paper on domestic regulation for which John Cooke had become the rapporteur.

2.2 Alec Berry explained the background as he saw it, expressing the hope that Services negotiations would be able to proceed unhindered by lack of progress elsewhere in the WTO. The main thing was to avoid getting too involved in rule making for E-Commerce and to hold firmly to the position that E-Commerce was not a new area of trade but a different method of delivery of trade. He made the point because there were parts of the Doug Gregory paper which needed that distinction to be brought out more clearly.

John Thirwell asked for an example. Alec Berry pointed to the wording in the introductory section of the paper at sub-para 5 where it talked about "domestic regulations related to E-Commerce". There followed a discussion about the language and terminology used in the paper and what some members saw as lack of clarity. Nick Lowe said the paper cried out for less obscure drafting but the Chairman said that the ESF timetable did not allow for a re-draft. ESF member organisations could opt out of supporting the paper if they wished.

2.3 Asked about the British Government’s view on the suggested horizontal group, Alec Berry said that in the interests of getting on with things, they preferred to see the E-Commerce work programme dealt with in the existing councils. A new body might be tempted to start from scratch and look at matters which had already been dealt with. Malcolm McKinnon added that it would be undesirable for example to re-open the question of whether transmissions via E-Commerce could encompass goods as well as services. The UK preferred to stick with the EU position that they were all services. Although it was not 100% clear it was better to go that way and have E-Commerce related matters covered just by the GATS. But it should be possible to make provision to give national treatment to products previously treated as goods, eg software, when transmitted electronically. The Chairman asked whether the last proposal was a purely British position or shared EU wide. Malcolm McKinnon said the UK had put it into the Article 133 Committee for debate. The objective was to reach an outcome rather than muddy the waters by discussing the classification.

2.4 A lengthy discussion ensued on clusters. Alec Berry and Malcolm McKinnon liked the concept as a technique of analysis. They were at pains to say that because clusters were an idea linked to E-Commerce that did not mean that E-Commerce was being looked at as a new service. It was rather that E-Commerce, as a new method of delivery, linked together a range of different services e.g. IT, Telecoms, Distribution and Financial Services in such a way that restrictions placed by a WTO member in one of the separate links would adversely affect the whole transaction. Using the clusters approach, drawing lines together from different services, was a means to ensure that E-Commerce worked. During the discussion, John Thirlwell said he was content so long as the clusters approach was used as an analytical tool rather than being seen as a block service in its own right. Nick Lowe said it underlined his view that clarity of definition was essential. The Chairman commented that the concept was very much in debate in the WTO. Julie Patterson said that if it could be used as an analytical tool to frame our arguments, it did not matter if others did not like it. Achieving the outcome was the important point. Nick Lowe supported the approach of the authorities and thought it was a way to move the E-Commerce debate forward.

3.1 Geneva. Malcolm McKinnon reported on the most recent services negotiating session in Geneva ending on 30th May. A Road Map had been agreed by the Council for Trade in Services (circulated at the LOTIS meeting) setting out a proposed timetable up to March 2001. This put end - December 2000 as the date by which WTO members would submit proposals; March 2001 would be a best endeavour deadline for completing work on classification and scheduling guidelines. This would also be the date for a stock-taking exercise, with the expectation that that would lead into starting substantive negotiations.

3.2 The drafting of negotiating guidelines now had to be undertaken, to establish dates for the tabling of requests (March 2001?) and offers (end-2001?) The Commission had produced a first draft (circulated at the LOTIS Meeting), building on the Seattle text. LOTIS Committee members present were asked to submit comments by the end of the week.

3.3 The assessment of trade in services showed a need for industry input to help improve the statistical base for demonstrating the benefits of liberalisation.

3.4 The UK and the Commission were encouraging the current debate in Geneva on tourism because this was an area where developing countries’ requests could be considered as a quid pro quo to requests of the developed world.

3.5 The Committee on Specific Commitments had been looking at classification of sectors and in particular at energy services.

3.6 The Working Party on Domestic Regulation was looking at possible additional disciplines on Transparency. Necessity in terms of domestic regulation was however proving to be a difficult subject to move ahead on.

3.7 The Working Party on GATS Rules had held an informal discussion on Safeguards. The Commission wanted also to put in papers on Procurement and Subsidies. He noted that evidence about subsidies was lacking and they were looking for input.

3.8 The first part of the review of MFN exemptions took place on 29/30th May. The review comprised prepared answers to pre-tabled written questions and was therefore somewhat artificial.

4.1 Brussels. Graham Bartlett said that six papers on sectoral request lists had been taken in the Commission the previous week. The UK was in an advanced position on these and a number of our original points had been fed in. There was more to be done. EU member states were generally content with the papers, but some had said that the EU’s requests should not be made in advance of its offers. The UK resisted that approach but argued that other WTO members should be persuaded to produce their request lists at the same time.

4.2  Julie Patterson asked what was expected from the ESF meeting with the Article 133 – Services Committee on 20 June; financial services representation looked thin. Malcolm McKinnon said there would probably be more scope for detail to be raised outside the formal meeting.

4.3  Mark Hatcher raised the Temporary Movement of Business Personnel, noting that several ESF members were concerned at lack of progress. He hoped it would feature in the meeting on 20 June. Malcolm McKinnon expected the issue to be discussed at some point. He said that Pakistan had put up a paper on Mode 4 in Geneva. The Chairman said that Christophe Manet of the Commission had told the ESF meeting on 8th June that he hoped the ESF would put pressure on member states. Graham Bartlett said that EU member states were not adopting an offensive stance on this because of their own domestic concerns. A request for case study evidence had just been received which would be circulated to LOTIS members. (Action Point). Mark Hatcher said he would be happy to feed views into the DTI.

5.1 Private Sector Activities. The Chairman said that Alistair Abercrombie had revised his paper on Safeguards in the light of comments at the last LOTIS Committee meeting. Committee members endorsed the new paper (with one typographical alteration) and this was duly deemed to have been conveyed to the DTI as an expression of the Committee’s views. (Action Taken).

5.2  The Secretary said that the exercise on Capacity Building had not yet produced sufficient information for him to put into a BI response to the Minister of Trade. He would be approaching members individually to ask for their input. (Action).

5.3  The Chairman and the Secretary briefly reviewed the recent and forthcoming events listed in the Agenda. Following the positive reception the ESF delegation to Geneva had received, Andrew Buxton was suggesting that rapporteurs of the individual working groups might take small groups to Geneva for specific talks. Following the call on the Minister of Trade, Malcolm McKinnon confirmed that the Minister’s letter to Pascal Lamy, supporting a vigorous pursuit of the services negotiations, was about to be sent. He said that Michael Servoz (DG Trade) had welcomed the idea of the letter.

5.4  The Chairman drew attention to the event in the City organised by the CBI for Pascal Lamy on 6th July.

5.5  The Chairman said that the visit by the Financial Leaders’ Working Group to Geneva in the following two days would cover most of the topics dealt with at this LOTIS meeting; therefore he would be well armed to feed in a LOTIS view in Geneva.

6.1 Any Other Business. The Chairman mentioned the review of BI being carried out under its new Chairman, Lord Levene. Any comments by individual LOTIS Committee members would be fed in by him to a special meeting to be held by BI for all its Committee and Advisory Group Chairmen with the review team on Monday 10 July. LOTIS members should feel free of course to offer their views direct to the review team if they preferred to do so.

6.2 Next Meeting. The Chairman hoped to invite Tony Sims of the UK delegation to Geneva to the next LOTIS meeting. A date would be fixed around the middle of September in advance of the round of services talks in Geneva scheduled for the last week of September/first week of October.

6.3 The Chairman closed the meeting with an expression of thanks to Mark Hatcher and PricewaterhouseCoopers for kindly providing the venue.