ASIA PACIFIC ECONOMIC COOPERATION
TRANSPORTATION WORKING GROUP
SIXTEENTH MEETING – HONG KONG, CHINA
NOVEMBER 1999

SHEPHERDS, HODs, SCCs MEETING
THE TPT-WG AND THE WTO 2000 ROUND
Submitted by Australia
October 1999

SIXTEENTH APEC TRANSPORTATION WORKING GROUP
MEETING – HONG KONG, CHINA - NOVEMBER 1999

AGENDA ITEM 5.2 (b) : The TPT-WG’s Relation to the Upcoming WTO Round Of Negotiations

AUSTRALIA

INTRODUCTION

The aim of this paper is to provide a basis for discussion amongst TPT-WG members on the TPT-WG’s approach to the WTO 2000 round of negotiations.

The negotiations will be launched at the WTO Ministerial meeting in Seattle on 30 November–3 December 1999. The Ministerial will issue a declaration covering a number of sectors, including services. There is currently no Maritime Transport Services (MTS) Agreement as negotiations on maritime transport services failed to reach agreement at the end of the Uruguay round and also at the post-round NGMTS negotiations. The coverage of air services in the annex on air transport services to the GATS is extremely limited.

• APEC Commitment to WTO 2000

APEC Economic Leaders said in their 13 September 1999 Declaration at Auckland, New Zealand that they are committed to the launch of a new Round of negotiations in the World Trade Organisation (WTO). The Declaration stated that APEC has a unique opportunity to give impetus to deliberations in the WTO and will give the strongest support at Seattle to the launch of a new round of multilateral negotiations within the WTO, and to endorse the positions adopted by Ministers. APEC Leaders also sought early progress in the accession negotiations to the WTO, including those APEC economies that are not yet WTO members.

Leaders agreed that the new round should:

• include comprehensive market access negotiations covering industrial tariffs in addition to the already mandated negotiations on services and agriculture;
• lead to timely and effective improvements in market access to the benefit of all participating economies, particularly developing economies and,
• consistent with this objective, provide scope to review and strengthen rules and disciplines
• have a balanced and sufficiently broad-based agenda and be concluded within three years as a single package which does not preclude the possibility of early results on a provisional basis.

In relation to air services specifically, APEC Leaders support implementation of the 8 options for more competitive air services, and identification of further steps to liberalise air services in accordance with the Bogor goals.

APEC Trade Ministers have earlier agreed that the WTO negotiations should be based around the concept of a single package under which the agenda is decided at Seattle and those issues agreed for inclusion are then negotiated with outcomes being finalised, bound and fully implemented together. It does not however preclude an early result from the negotiations so long as this is related to the single package.

APEC is supporting a comprehensive negotiation on services for the first time. Ministers have highlighted four areas – transportation, tourism, environmental and energy services - where APEC’s work leaves members well placed to play a particularly influential role in the forthcoming negotiations.

- Maritime Transport Services

The Uruguay Round of negotiations concluded on 15 December 1993 and agreement was unable to be reached on maritime transport services. Post round negotiations on MTS commenced in April 1994 with the establishment of the Negotiating Group on Maritime Transport Services (NGMTS) which were aimed at obtaining commitments in international shipping, auxiliary services and the use of port services by 30 June 1996. Participation in the negotiations was on a voluntary basis and 56 governments elected to participate fully in the negotiations with another 16 governments participating as observers. The NGMTS also discussed the possibility of including multimodal transport services as part of an MTS agreement. Despite intense negotiations, agreement was not reached, perhaps reflecting the highly regulated nature of this sector in some key countries.

The final outcome from the negotiations was a decision to suspend negotiations on MTS until the year 2000 and to suspend the Most Favoured Nation (MFN) treatment for the maritime sector pending a final outcome of the 2000 round. Although 24 participants submitted a draft offer package, this was conditional on a matching, comprehensive offer from the US. The US was unable to submit such an offer before the end of negotiations in June 1996. A number of participants expressed a reluctance to consolidate offers without a US offer and as a result it was agreed to postpone negotiations on MTS.

- Aviation services

In the Uruguay round an annex was added to the GATS on air transport services. The annex applied to aircraft repair and maintenance services, the selling and marketing of air transport services and computer reservation system (CRS) services but did not apply to hard rights or services directly related to the exercise of traffic rights.

• Maritime Initiative Group

In accordance with the Joint Ministerial Statement of Ministers responsible for Transportation in June 1997, TPT-WG developed at its 13^th meeting the Maritime Mission Statement for promoting an efficient, safe and competitive operating environment for maritime transport to be achieved by economies working together and with the private sector, with the objective of fostering the concept of intermodalism and encouraging member economies to adopt a forward looking origin-to-destination approach including modal interface and onward transport.

TPT-WG members agree, in accordance with the Bogor Declaration and the principles of the Osaka Action Plan, on the need to encourage and foster liberalisation, efficiency, facilitation, harmonisation, transparency, economic and technical cooperation, and environment protection and safety in maritime transport. Members agreed to undertake a continuing process of liberalisation of maritime transport to ensure through fair, reciprocal and equitable market access and investment opportunities, the creation of a competitive transportation operating environment for all maritime transport service providers.

The Maritime Initiative Group led by Japan has been progressing initiatives aimed at achieving the purpose of the Maritime Mission Statement. This includes the Transparency Exercise Questionnaire (TEQ) aimed at providing member economies with information on maritime policies, promote awareness of intergovernmental policy coordination and cooperation in maritime transport. It consisted of 12 major questions addressing shipping policies and non-government activities affecting international shipping. The TEQ has revealed comprehensive information on shipping policies and provides a foundation for future discussions in APEC on the liberalisation of the maritime sector. Building on the outcomes of the TEQ project is the Australian led project "Facilitation of International Shipping" which aims to address the impact of maritime policy reforms on international shipping services among APEC economies. It is hoped this project will demonstrate the benefits of liberalised maritime policies to APEC economies and international shipping. The TEQ would provide support under Article 3 of the GATS for any maritime commitment made by WTO members in the 2000 round.

• Aviation Services

The bilateral system of negotiating air services is universal and its principles are well understood. Australia recognises that while many Governments accept the need for change, they may have legitimate concerns about the timing and direction of moving market access for international airlines beyond the bilateral system and into regional and, ultimately multilateral agreements.

The mandated review of air transport services in the GATS does, however, offer APEC members a unique opportunity to explore and commit to alternative structures for market access in aviation, not just for hard rights, but for the ancillary services that, through their direct relationship to international aviation, are excluded from the GATS.

The GATS is currently the only multilateral structure available that may, through transparency and equality of opportunity, reward efficient service providers and deliver the benefits looked for by consumers of aviation services.

The TPT-WG Air Services Group developed a consensus on eight options for the regional liberalisation of international aviation. The options covered:

• Ownership and control

• Tariffs

• Doing business matters

• Air freight

• Multiple airline designation

• Charter services

• Airline cooperative arrangements; and

• Market access

While these options were tailored for the APEC process, the work of the Air Services Group could well form the basis of GATS discussion.

Role of the TPT-WG in the WTO 2000 Round

While members may not wish to make any decision before the WTO negotiating framework is decided at the Seattle meeting, members may nevertheless wish to consider a role for the TPT-WG in the WTO round. This would include discussing recent developments at the WTO that are transport related and including strategic issues relevant to any negotiation of sectors or issues of interest to TPT-WG.

If the TPT-WG decides it has a role to play in future negotiations related to transport and wishes to convey its commitment to the process, the TPT-WG could provide a statement of its intent and support for the WTO round and for services negotiations specifically to the next Transport Ministerial Meeting.

It is not uncommon for APEC working groups to actively pursue

WTO issues of interest. The APEC Telecommunications Working Group supported the negotiations of telecommunications services in the last round. In addition to developing an APEC Ministerial Statement on the benefits of a liberalised telecommunications sector, TEL also conducted a workshop on the telecommunications negotiations.

There are also potential linkages with other international organisations involved in WTO work. Australia recently submitted a paper on "Overcoming Barriers to Achieving a Maritime Transport Services Agreement at the 2000 round" to facilitate discussion on the resumption of WTO negotiations at an OECD Maritime Transport Committee (MTC) workshop with major Asian and Latin American non-MTC member economies (DNMEs), held on 27 October 1999. The paper calls for a re-examination of major issues relating to maritime transport services and outlined a number of options for the MTS model schedule. It was agreed at the workshop that an electronic discussion group between MTC and DNME members be established to facilitate exchange of views on issues relating to the 2000 round.

The TPT-WG may wish to consider a similar role to that adopted by TEL or/and the OECD MTC. The Maritime Initiative Groups is an ideal TPT-WG forum to consider WTO issues relating to future negotiations on maritime transport services. Its work program could include initiatives such as the establishment of an electronic discussion group through the TPT-WG web site and technical workshops. Members may also wish to build on the work that has already been done in the TPT-WG in relation to the eight options for liberalising air services.

RECOMMENDATION

That the TPT-WG determine its relation to the WTO 2000 round, including whether it has a role in possible approaches to services negotiations.

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