EU wants services in open zone

By BRIAN FALLOW

The European Commission has drawn up a wide-ranging wish list of concessions it wants from New Zealand in services negotiations under the Doha trade round.

The EU wants an end to the requirement for Overseas Investment Commission approval of foreign purchases of rural land or of business acquisitions over a certain threshold (which was raised to $50 million in 1999).

It wants the Kiwi Share restriction on any one overseas shareholder in Telecom having no more than 49.9 per cent of the shares removed.

The service sectors in which it wants overseas firms to be free to compete on the same terms as New Zealand ones include water and wastewater services, postal services and research and development.

It wants more liberal rules on the rights of contract workers and intracorporate transferees to work in New Zealand.

There are other proposals, 29 pages worth, out of 1000 pages covering the EU's rich and middle-income trading partners, leaked to the Guardian newspaper.

They extend to removing the residency requirement for becoming an engineer capable of certifying certain works.

The overarching context is that if the Doha round, launched late last year, is to achieve meaningful liberalisation in agricultural trade, the quid pro quo for Europe and, for that matter the United States, is likely to be in services sectors.

"Bring it on!" was the reaction of Trade Liberalisation Network executive director Stephen Jacobi. "New Zealand has more to gain than perhaps any other country from the elimination of Europe's disastrous farm subsidies and trade barriers. If it ever came to a choice between retaining the Overseas Investment Commission and obtaining free entry of New Zealand lamb and butter into Europe, I know what side my money would be on."

Phil Lewin, formerly New Zealand's negotiator on the General Agreement on Trade in Services (Gats) and now chief executive of the Wellington Regional Chamber of Commerce, said: "It's a document covering the waterfront and written by bureaucrats in Brussels. We should regard it as the height of their ambition."

It was similar to New Zealand's request to the EU and the United States to stop "subsidising the hell out of their farmers" through export subsidy programmes.

The Brussels proposals had yet to be approved by individual member states, and would probably be amended in the process, Lewin said. The EU and other Gats members will put up their opening set of requests of each other by the end of June.

The Doha round is scheduled to take three years, but if the Uruguay Round is anything to go by, it will take much longer than that.