MERITS of MAKING FULL GATS COMMITMENTS in Computer services

Seminar on Liberalisation of Computer Services

Geneva, 28 September 2005

Julien Guerrier, Directorate-General for Trade

Importance of computer related services

• Fundamental for economic activity, permeate all sectors.

• Role in building infrastructure, tool for economic development.

• Lead to employment creation in developing and developed countries.

Source: CEPII

Computer related services:a cornerstone of e-Commerce

• Computer related services enable the electronic provision of other services.

• Computer related services are themselves increasingly delivered electronically.

Computer related services: a rapidly evolving sector

• Speed of technological developments.

• These developments are fed through to other services sectors that are users of computer related services.

• They lead to increased speed and capacity, ease of use, flexibility and efficiency in the fulfilment of their IT needs.

Consequences of technological developments

• More and more elaborate computer and related services- e.g. web or domain hosting, data mining, etc.

• These elaborate computer services consist of a combination of services that can fall into some or all CPC84 subsectors.

Examples of elaborate computer related services

COMPUTER RELATED SERVICES

CPC 841 - Hardware Consultancy

CPC 842 - Software Implement.

CPC843 –

Data Processing

CPC 844 –

Data Base

Maintenance

CPC 845 -Maintenance and Repair

CPC 849 - Other

Application Hosting X X X

E-Commerce Hosting

X X X

Consequences for scheduling commitments in Computer related services

• Potential misunderstanding amongst Members as regards the scope of the commitments made under CPC 84.

• Distinctions made in Members schedules between the sub-sectors of CPC 84 become less and less relevant.

Scheduling at “two-digit level”

• Members are therefore advised to schedule their commitments at « two-digit level » (CPC 84), in order to:

- Reflect technological developments and commercial realities

- Minimise the risk of confusion in seeking whether a particular computer service is covered by commitments when it involves activities falling into several sub-sectors.

Additional clarity provided by the “Understanding”

• In order to help WTO Members cope with technological developments, and, when facing evolved services, to better grasp whether they are actually covered by CPC 84, the EC proposed to develop an « Understanding » on the scope of the sector.

• Discussed by Friends, CSC, CTS.

The “Understanding”

• « Functional » description rather than list of services bound to be rendered obsolete by rapid technological changes.

• No change in classification.

• Gives comfort to commit the sector as a whole (two-digit level), including CPC8499 « other computer services ».

Which commitments should be scheduled?

• Services often delivered electronically.

• Mode 1 / Mode 2 distinction difficult

-> Schedule consistent (full) commitments for modes 1 and 2

• No restriction to investment (transfer of knowledge, growth and employment).

• Importance of Mode 4 commitments.

Conclusion: Schedule full commitments for CPC 84

• Additional elements: lightly regulated sector

• Importance of Government Procurement