Press Release

Allegation on the Government's "blackbox" operation in the WTO services negotiations totally unfounded

Sunday, July 24, 2005

The Director-General of Trade and Industry, Mr Raymond Young, said today (July 24) that the allegation made by the Hong Kong People's Alliance on WTO and some civil society groups on the Government's "blackbox" operation with respect to its participation in the services negotiations of the World Trade Organisation (WTO) was unfounded.

He pointed out that the Government's participation in the WTO services negotiations had all along proceeded in a transparent manner. Apart from providing the general public with updates on the latest development of the negotiations, the Government had conducted public consultation on Hong Kong's objectives and priorities in the negotiations.

He said that Hong Kong's existing commitments on trade in services made under the WTO General Agreement on Trade in Services (GATS) were public information. Interested parties could visit the website of the WTO (www.wto.org) anytime to peruse the schedules of specific commitments of Hong Kong or any WTO Members. They could also visit the website of the Trade and Industry Department (TID) (www.tid.gov.hk) for a detailed summary of Hong Kong's existing commitments.

As regards public consultations, Mr Young said, "to prepare for the current round of services negotiations, we have conducted two public consultation exercises so far, one from May to June 2002 and the other from February to March this year. We invited about 400 organisations, including the chambers of commerce, major trade and industrial organisations in respective sectors, academic institutions and civil society groups, as well as the general public to express their views on the objectives and priorities of Hong Kong in the negotiations. In parallel, we also consulted bureaux and departments responsible for the different services sectors. Where appropriate, the relevant bureaux and departments had also sought views from the major stakeholders in their respective sectors."

"Various submissions were received on both occasions. Hong Kong's requests, offers as well as negotiating positions in the current round of services negotiations are drawn up on the basis of these submissions," Mr Young added.

Mr Young said Hong Kong tabled its initial offer on further liberalisation of trade in services in April 2003 and revised offer in June 2005. In addition to publicising the gist of the offers, the Government has also uploaded a detailed summary of the offers onto the TID's website (http://www.tid.gov.hk/english/trade_relations/tradefora/files/hkc_services_commitment.pdf) for reference by the interested parties.

In response to views that the Government should announce the requests of the services negotiations, Mr Young explained why the Government had not disclosed the relevant information. "Insofar as Hong Kong's requests for market opening tendered to other WTO Members are concerned, these requests were formulated according to the views received in the public consultation which involve commercial sensitivity. Thus we do not consider it appropriate to disclose them to the public. Besides, from the negotiations' point of view, to disclose our requests in full at this stage may limit the strategies that we can deploy during the negotiation process and in turn jeopardise the overall interests of Hong Kong," said Mr Young.

"As regards the requests put forward to Hong Kong by other WTO Members, as far as we are aware, WTO Members normally do not make public the details of these requests. Given that these requests involve information tendered by other Members, Members generally consider that they are obliged to keep these requests confidential. We have all along followed the same practice." Mr Young said

Mr Young indicated that, without prejudice to the confidentiality of the negotiations, the Government would continue to keep the community informed of the latest progress of the negotiations. The Government also undertakes to exercise prudence when considering the requests put forward by other Members, so as to secure Hong Kong's interests.

Clarifying the misconception that services negotiations will lead to privatisation of public services and expedite the pace of their outsourcing, Mr Young stressed that the GATS did not require privatisation of any public services. Neither would services negotiations pave the way for the outsourcing or privatisation of public services.

"In the process of the services negotiations, we will not deviate from the existing policies of the respective policy bureaux. Even if individual bureaux and departments have any plans for outsourcing or privatisation, their decisions will be based on their own policy considerations. In no way will such decisions be induced by the requests or pressure of the WTO services negotiations, " said Mr Young.

He pointed out that the existing commitments or offers on further liberalisation of trade in services made by all WTO Members, including Hong Kong, did not cover essential public services that were supplied neither on a commercial basis nor in competition with services suppliers from the private sectors, as these services were in fact outside the ambit of the GATS.

Mr Young said, WTO Members were free to, taking into account their own economic and social conditions, as well as national policy objectives, decide whether or not to open up certain services, and if so, the extent of liberalisation and its timetable, and whether to make commitments on the relevant services. In the case of Hong Kong, none of our existing commitments or offers would necessitate a change to our existing regime or its current level of openness.

"The services negotiations are an on-going process and will only be concluded upon the completion of the current round of WTO negotiations. Further views from any interested parties during the process of negotiations will be welcome. The Government will take them into account when reviewing Hong Kong's negotiating positions in the services negotiations," Mr Young said.

Ends