Dr WK Chan, Secretary General, Hong Kong Coalition of Service Industries

Ditchley Park, a historic house in the pristine countryside of Oxfordshire, was the venue for the Coalitions of Service Industries to hold their conference to prepare for the next round of negotiations on liberalisation of trade in services. The so-called "Services 2000" negotiations would not be launched until the year 2000 but since the Uruguay Round has taken some four years to plan, it was felt 1998 was not too early a time to begin preparation.

The nearest British Rail station to Ditchley Park is Charlbury, a small country station with no staff nor taxis. Access to Ditchley Park had to be arranged well beforehand and the number of participants was limited to 42.

Surrounded by several acres of wood and grassland in the environs, the house itself opens to a fine English garden with a small lake on one side. The interior is filled with antiques from the 16^th century on. In all, Ditchley provided the perfect setting for a meeting of minds, which was what the 42 trade experts set out to do over the next three days.

The first meeting started immediately after everyone checked in and had their afternoon tea. The Chairman of the whole conference was Jaime Serra, the former Mexican Trade Minister who was one of the architects of the General Agreement on Trade in Services (GATS) and the North American Free Trade Agreement (NAFTA). It was he who drafted the first version of the GATS text.

The Conference took place in a roundtable in the "Library". I was seated next to Jeff Lang who was, until four weeks before, Deputy US Trade Representative with the title of Ambassador. There were many familiar faces around like the octogenarian Dr Rodolfo Martinez from Argentina, private sector WTO veteran Julian Arkell who hardly missed any CSI conference, and Bob Vastine, President of the USCSI which organised this event.

The session started with three presentations by David Hartridge, WTO's Director of Services, Robert Madelin of the European Community and American Enterprise Institute's Claude Barfield. Not much time was spent on progress review of the GATS because the main purpose of the session was to look forward. Claude Barfield brought up the subject of the Internet and how trade policy had to catch up with commercial reality and not to be left behind. That became a topic that the Conference kept coming back to in later discussions. Another theme which became recurrent was that of constituency building, especially in gathering business sector support for continual liberalisation.

The importance of domestic regulatory reform was identified upfront as a key to the way forward. In the discussion the Asian crisis was cited as a possible drawback to globalisation. As the only participant from that part of the world (the other two Asian delegates were from Japan), I felt obliged to assert that the Asian financial crisis presented an opportunity for more, not less, liberalisation, using the success of the financial services negotiations as example.

From left: David hartridge, Jaime Serra and Bob Vastine

After some solid discussion, the first session ended a big success. There were no long-winded speeches, instead all panellists were short and crisp in their presentations. Little warming up was needed for discussion and dialogue on which the bulk of the time had been spent. What was more, we managed to end punctually for dinner.

Dinner was another English experience. Delegates, all dressed up, were seated in two long tables in a candle-lit "Dining Room" to socialise while being served. After dinner Harry Freeman, a founder of the USCSI, rose to tell the story of how the services movement originated at the end of the Tokyo Round, in a Conference in the same House held 19 years before. At the time they hardly went beyond debating the definition of service. A few years later, in 1982, the USCSI was formed and became the herald in putting services on the global agenda.

One of the people who had been present also at the earlier Ditchley Park conference was Geza Feketekuty. A Hungarian who became a long time trade negotiator for the US Trade Representative (USTR), he had been a key player throughout the services negotiations of the Uruguay Round. He had then retired from the USTR and was presently engaged, among other things, in a study commissioned by the Hong Kong government for its WTO Office. He was indeed a most suitable man for the task.

The next day started off with an excellent home-made English breakfast before the first morning session kicked off. First Pierre Sauve from the OECD gave an assessment of the GATS "architecture", i.e. the structure of the GATS agreement. Then Geza Feketekuty offered his assessment on the work that needed to be done especially in regulatory reform. The importance of regulatory reform for liberalisation and the role of regulators then became a main focus of discussion.

The Library, where the Conference was held.

In discussing de-regulation developing countries became a natural target. It was difficult for the discussion to be conclusive but when Dr Martinez tried to sum it up with a story, every one listened reverently. His story went like this. A young banker asked an old banker what the secret of success was. "Two words: good decisions," came the reply. Asked how good decisions were made, the answer was, "One word, experience." The young man then asked his mentor the secret to experience. The old man said, "Two words. Bad decisions."

The next session was for “sector snapshots”. All the speakers came from the private sector. The first was Sir Nicholas Baynes from the British counterpart to the CSIs, elegantly named British Invisibles. From what Sir Nicholas said, the City of London was quite pleased with the outcome of the financial services agreement. The same sentiment was expressed by Ken Lindhorst of AT&T who ranked the WTO telecommunications agreement a success.

Not so for Charles Heeter of Arthur Andersen who spoke on the work of the GATS Working Party on Professional Services (WPPS). While acknowledging that the WPPS’ work had been substantive such as developing mutual recognition guidelines, the accountants were disappointed that the talks were not conclusive enough. But there were still three more months to go for the WPPS before the deadline of July 1998 so some progress might yet be made. I had a special interest in this sector because the current Chairman of the WPPS was Hong Kong's Michael Stone, the deputy head of government's Geneva Office.

The two other speakers were Peter Finnerty from Sea-Land, who bravely spoke of the maritime sector as being a very open sector in the US; and John Crysler from Electronic Data System who wanted the Internet to be covered in the next round of negotiations.

One interesting question raised during the discussion was that of a “hybrid product”, a concept being developed by the US to refer to situations where both goods and services were involved, such as in an e-commerce transaction. Another subject was that of the nature of the year 2000 negotiations, whether it should be limited to services (for which it has been mandated) or expanded to an all-embracing “Millenium Round”. There was no concensus although the European delegates seemed to favour a big round with something for everyone.

After lunch the Conference adjourned for a short trip to tour Oxford city or Blenheim in the Oxford countryside. Whenever an international conference is held in Ditchley, England earns some “invisible” exports as well as admiration for the marvels of the English countryside.

Indeed, the Ditchley Foundation which owns and manages Ditchley Park was set up in 1958 specifically to promote international, especially transatlantic, link. That link is to be sustained through holding of conferences on public policy issues of interest to people on both sides of the Atlantic, in accordance with the wish of Sir David Wills who set up the Foundation in 1958.

Originally, the House was built by about 1580 by Sir Henry Lee, a leading courtier and favourite of Queen Elizabeth I. Throughout history the Lee family and others after them were all closely associated with royalty and nobility. More recently, the House was once residence for Winston Churchill who lived there briefly during the War.

Having been a regular visitor to England, I did not join the Oxford trip but instead stayed in to savour some of the history that filled the House. That gave me a chance to talk to Andrew Buxton, Chairman of Barclays Bank who was very complimentary about Hong Kong's attendance. He expressed a great deal of understanding of the current difficulties in Asia and of the need for greater awareness within Asia of the benefits of liberalisation.

The countryside tour did not take long for participants had to be back for a pre-dinner session on “parallel paths of liberalisation”. The Chairman Jaime Serra started off himself by giving his views on regional agreements and how they complement the WTO. Stuart Carre, a former Canadian official in Geneva who once chaired the WTO Working Party on GATS Rules, spoke about the rising investment flows and the importance of integrating investment disciplines. Jeff Lang then highlighted the importance of regulatory reform from the point of view of competition, arguing for a pro-competition model for regulations. They were followed by Andy Stoler from the USTR who explained the dispute settlement process of the GATS, using the banana case between the EC and US as illustration. Ostensibly a case for trade in goods, the US had been able to argue that a service issue was involved because US wholesale service providers were discriminated against in the banana dispute. That case was now regarded as a landmark for GATS.

In the discussion the distinction between goods and services was questioned. The need to build a stronger business constituency in the face of the backlash against globalisation was again raised. I was somewhat surprised to hear that non-governmental organisations (NGOs) were “sinking” the Multilateral Agreement on Investment (MAI) being developed by the OECD. I had thought all along that the MAI originated from the US business lobby and that it was going well. I learnt something new when the MAI was described as being a public relations disaster, and that US business was withdrawing its support.

During dinner a special table was arranged for eleven of us in the “Breakfast Room”. By then there had been a lot of bonding and mutual understanding among participants, so the time was right to consider something more novel. Earlier during informal discussions the concept of forming a global network for the CSIs had been mooted. That idea became a proposal to be discussed among representatives of private sector association.

The concept of a global network had been suggested as early as 1995 in Dublin, but somebody had to take the initiative. There was an awareness that like many international efforts, a global alliance would not be effective without the US, so when it was the USCSI which took the lead to do it, I was sure that something would be achieved this time.

After dinner a 12-people “drafting group” was formed to produce a paper to record the key issues addressed in the Conference and also to announce the formation of the Global Services Network. The group had to forego port and brandy but in the end they all felt it worthwhile.

The final day of the Conference was a Sunday although it did not feel like one. For those of us on the drafting group, morning breakfast was a continuation of the drafting for the final statement.

The morning session had three diverse subjects crammed into one and half hours. First Robert Litan from the Brookings Institute gave an account of the US concern over the EC privacy directive, which the US regarded as being too strict. One possible course of action for the US was to take the matter to the WTO. Then Financial Times editor Guy de Jonquieres spoke on the talks between the US and EC on the “Transatlantic Marketplace”. His assessment was that the talks would probably only achieve modest results.

Michael Gadbaw, a Vice President of General Electric, gave his views about China accession to the WTO. Talking like a Sinophile, he made it clear that both he and General Electric supported China's accession. But he also pointed out the practical difficulty, the major issue being that the US government had not made up its mind about China. He described the annual MFN debate as preposterous and that it amounted to the US deciding every year how it wanted to conduct its commercial relationship with China.

In the discussion that followed, Dr Martinez took the opportunity to canvass support for relaxation of the privacy regime in his own country. On China’s accession I gave a more optimistic view by citing the reforms of state owned enterprises as evidence of China moving towards a market system. Akira Yamada, who was in charge of the services negotiations in Japan, also expressed support for China’s accession.

During that session Lord Douglas Hurd arrived. He had been guest of honour at the celebration for Shakespeare's birthday at Stafford the day before. A former Foreign Minister of Britain, Lord Hurd was now Deputy Chairman of NatWest and Chairman of British Invisibles.

The concluding session was spent mostly on refining and embellishing the press statement. Not surprisingly, the paper generated a lot of suggestion and discussion and as a result the final version was some 50% longer than our draft. The final conclusion about the GSN is that it would be a loose, “virtual” body with a Web site as a point of contact. It would be made up of CSIs and related bodies as the core, but everybody in the service sector worldwide would be welcomed to join. It would focus primarily on services trade policy and in the meantime it would concentrate on Services 2000.

A press conference was arranged for the next day and I was to be one of the presenters, being the only CSI representative from Asia.

The farewell lunch was preceded by an extended period for cocktails for people to say goodbye. I spent some time with Lord Hurd who seemed very interested in Hong Kongs' elections on 24 May. We then bid farewell to Ditchley and went our separate ways to London.

The press conference was arranged by British Invisibles at the City Corporation in the City of London. I was seated next to Lord Douglas Hurd who chaired the press conference together with Jaime Serra. Other panelists included Jeff Lang, Bob Vastine and Sir Nicholas Bayne. The panel were very pleased that 23 media representatives had confirmed their attendance, on a Monday morning.

After Lord Hurd did the opening, Jaime Serra gave an overview of the result of the Conference, drawing attention particularly to the Global Services Network. I then spoke briefly about China's accession, giving the optimistic view while also emphasising the importance for new members to abide by WTO rules. Jeff Lang dealt with regulatory reform and the framework for further services liberalisation. The questions and answers that followed was rather lively. In response to a question about the usefulness of GATS, I took the opportunity to cite the Hong Kong experience of liberalising international telecommunications by removing the Hong Kong Telecom monopoly eight years ahead of schedule, as an example of how liberalisation worked. Afterwards I was interviewed by the Chinese Television Network which was interested in how China related to the global services movement.

That ended all the programme in England but we parted in the sure knowledge that in a few week's time, the same messages from Ditchley would be resurfacing in the Internet with the launch of the Global Services Network homepage.