USTR OFFICIALS BRIEF DUTCH ON USG WTO SERVICES

UNCLAS SECTION 01 OF 02 THE HAGUE 000356

SIPDIS

SENSITIVE

SIPDIS

STATE FOR EUR/UBI, EUR/ERA, EB/TPP/MTA (AWHITTEN)
STATE PASS USTR FOR BLISS AND MELLY

GENEVA FOR USTR ALICIA GREENIDGE

USDOC FOR 4212/USFCS/MAC/EUR/OWE/DCALVERT

E.O. 12356: N/A
TAGS: ECON ETRD WTO PREL EUN NL
SUBJECT: USTR OFFICIALS BRIEF DUTCH ON USG WTO SERVICES
POSITION

SENSITIVE BUT UNCLASSIFIED. PLEASE TREAT ACCORDINGLY.


1. (SBU) SUMMARY. Senior USTR representatives recently met
with Dutch trade officials to reinforce the USG commitment
to seeking an "ambitious" agreement on services negotiations
within the WTO Doha Round. Despite concerns about progress
to date, meeting participants agreed on the need to
intensify efforts, including work plans on market access and
actual texts on domestic regulations. Rules discussions,
they agreed, remained largely an "information gathering"
exercise at this point. This cable was cleared by USTR.
END SUMMARY.


2. (U) On January 31, Christine Bliss, Acting Assistant
USTR for Services and Investment, and Christopher Melly,
Director of Services Trade Negotiations, discussed progress
on services negotiations within the WTO Doha Development
Round with Willem van der Leeuw, Deputy Director of the
Trade Policy and Investment Department, Ministry of Economic
Affairs (MEA),Wieger Wiersema, Senior Policy Officer for
Services Negotiations, Trade Policy and Investment
Department, MEA, and Hanneke Boerma, Policy Officer for
Trade Issues, European Cooperation Department, Ministry of
Foreign Affairs.

NOTHING TO SHOW ON SERVICES?
--------------


3. (SBU) Bliss began by noting that the USG remained
"ambitious" on seeking agreement on all elements of the
current services negotiations (market access, domestic
regulations, rules, and development). Given recent rumors
to the contrary, van der Leeuw welcomed this confirmation.
He remarked on the poor state of services negotiations to
date, adding that the offers currently on the table had not
met Dutch and EU expectations. The Dutch had also been
disappointed at the WTO Ministerial in Hong Kong by a lack
of ambition on services by developing countries. While
agriculture was clearly an important issue for developing
countries, a balanced outcome was also needed, including
movement on services negotiations. Moreover, the EU (i.e.,
the French) believed that it had moved on agriculture
without receiving anything in return in the areas of
services and non-agricultural market access (NAMA).


4. (SBU) Van der Leeuw was hopeful that plurilateral
discussions would help to move the talks forward. Like the
U.S., the Netherlands has a strong services sector
(accounting for over 70 percent of GDP) that is dependent on
greater international market access for growth. Key sectors
of interest for the Dutch included financial, transport,
distribution, environmental, and postal/express delivery
services. Van der Leeuw stressed that the Dutch sought to
focus their efforts on those sectors where results were
feasible.

WORK PLAN NEEDED ON MARKET ACCESS
--------------


5. (SBU) Relative to other negotiations and in light of
the breakdown in talks at Cancun in 2003, Bliss offered that
the lack of progress on services was primarily due to
factors outside the services area. She expressed concern
that a plurilateral path might not result in effective
negotiations, and indicated that the collective discussions
should not replace the bilateral request-offer process,
which promised the best opportunity to pursue individual
priorities. She also cautioned that the July 31 deadline
for services negotiations should not be used as an excuse
for delaying parallel movements on agriculture talks.
Instead, it was now important to intensify all efforts,
including a push for actual work plans on market access in
services so that Ministers would have a clear signal in
April concerning the progress of the three main negotiating
areas (services, agriculture, and manufactured goods).


6. (SBU) Wiersema agreed on the need to intensify
bilateral discussions, but suggested that finding a critical
mass that was willing to talk could be the only way to move
forward at this stage. He also questioned whether it would
be difficult for the U.S. to request liberalization on

THE HAGUE 00000356 002 OF 002


insurance, especially in light of U.S. market access
limitations at the state level. While the USG expected
certain limitations at the state level, as the EU might
encounter at the national level, Bliss assured the Dutch
that the USG was committed to aggressive offers on insurance
and financial services in general.


7. (SBU) Bliss also highlighted the importance to the U.S.
of telecommunications and remaining differences between the
U.S. and EU on the definition of value-added. She cautioned
that the EU offer in this area had been viewed as a rollback
and stressed the need for the U.S. and the EU to resolve
this issue before others used it as another reason for not
moving forward. Frank talks were also needed on content and
how to cover future platforms.

MODE 4 -- NO EXCUSE FOR FURTHER MOVEMENT
--------------


8. (SBU) Bliss worried that countries like Brazil and
India were using Mode 4 (temporary entry of persons who
provide services) as an excuse for no movement on services.
The USG recognized the importance of Mode 4 services, both
to U.S. industries and to U.S. trading partners. However,
commitments made by the U.S. on Mode 4 services remained
some of the best among WTO members.

MOVING TO TEXT ON DOMESTIC REGULATIONS
--------------


9. (SBU) Bliss noted that India, which had the lead on
domestic regulations, was seeking greater commitments on
contractual service suppliers in the area of horizontal
disciplines on qualifications, standards and licensing
requirements. This approach had caused problems for the
U.S., as American professional associations and state
regulators were concerned that it would create pressure to
lower existing standards, especially for accountants,
engineers, architects and medical professionals.


10. (SBU) Wiersema stressed the importance of getting
legal text on domestic regulations presented. Bliss agreed,
adding that any text would need to be tabled by April to
ensure agreement by year's end. Additional issue papers
would only result in further delays.

RULES - AN INFORMATION GATHERING EXERCISE
--------------


11. (SBU) On rules discussions, meeting participants
agreed that this was largely an "information gathering
exercise" at this point. Bliss said Malaysia had raised the
issue of emergency safeguard mechanisms (ESM),but was
largely seeking "political comfort."

BLAKEMAN