TWN Info Service on WTO and Trade Issues (Mar17/17)
20 March 2017
Third World Network
GATS domestic regulations disciplines hinge on progress in agriculture
Published in SUNS #8423 Thursday 16 March 2017
Geneva, 15 Mar (D. Ravi Kanth) -- Members of the African Group along with the
least-developed countries on Tuesday (14 March) delivered the strongest message
yet that any potential deliverables in domestic regulation disciplines at the
World Trade Organization's eleventh ministerial meeting (MC11) in Buenos Aires
will hinge on commensurate results in other areas of the Doha Development Round
(DDR), particularly agriculture, services negotiators told SUNS.
On India's proposal for substantive commitments as part of a new agreement on
trade facilitation for services (TFS), the African Group said it is extremely
"broad" without any mandate at this juncture. The Indian proposal
would impose burdensome multilateral obligations for members, the African Group
During a meeting of the WTO Working Party on Domestic Regulation (WPDR) on
Tuesday, many developing and least-developed countries severely criticized
proposals on "transparency," "development of measures" by
Australia, Canada, Colombia, the European Union, Israel, Japan, and Mexico; and
"administration of measures" by Australia, Chile, Colombia, the
European Union, Japan, Mexico, Norway, Peru, Korea, and Chinese Taipei.
Bolivia said the proposal by major developed and several developing countries
on transparency, development of measures, and administration of measures in
domestic regulation doesn't seek any improvements in Mode 4 concerning
short-term movement of services providers.
It would also curb the right to regulate services in politically sensitive
areas, Bolivia said, suggesting that the proposal would also deny
"regulatory policy space" for developing countries.
Speaking for the African Group, South Africa said African countries are not
demandeurs for domestic regulation disciplines.
But they want the right to regulate and to introduce new regulations concerning
the supply of services for accomplishing their overall developmental policy
objectives, South Africa said.
The African Group reminded the proponents that work on improving disciplines in
domestic regulation as per Article VI: 4 in the GATS is part of the overall
development round as mandated in the Doha Development Agenda.
Without internal balance in each area, particularly agriculture, and balance
among all DDA issues, it would be naive to work on DR (domestic regulation),
the African Group cautioned.
Moreover, the general thrust of the proposals on transparency, development of
measures, and administration of measures, as set out in the separate proposals
by the proponents, impose burdensome regulatory disciplines that go far beyond
the Article VI: 4 of GATS mandate.
The mandate in the Article VI: 4 of GATS says: "With a view to ensuring
that measures relating to qualification requirements and procedures, technical
standards and licensing requirements do not constitute unnecessary barriers to
trade in services, the Council for Trade in Services shall, through appropriate
bodies it may establish, develop any necessary disciplines. Such disciplines
shall aim to ensure that such requirements are, inter alia: (a) based on
objective and transparent criteria, such as competence and the ability to
supply the service; (b) not more burdensome than necessary to ensure the
quality of the service; [and] (c) in the case of licensing procedures, not in
themselves a restriction on the supply of the service."
The African Group asked the proponents as to why they are seeking "a
piecemeal approach and fragmentation of the proposals" and why they are
not tabling "a single working document".
It reiterated the Group's commitment to engage in the discussions but on the
condition that there is movement across all areas of the DDA, according to
negotiators who were present at the meeting.
On behalf of the least-developed countries, Uganda said that "over the
years, the LDCs' services trade deficit has widened from US$16.43 billion in
2005 to US$39 billion in 2015. Being net importers of commercial services, the
LDCs will face further erosion in their export of services because of domestic
regulation disciplines being demanded by the proponents."
Uganda said that domestic regulation disciplines imply effective market access
and the LDCs will be granting "unfettered" market access because of
Therefore, any deliverable on domestic regulation must state explicitly that
"LDCs shall not be required to apply these disciplines... LDCs are
nonetheless encouraged to apply these disciplines, to the extent compatible
with their special economic situation and their development, trade and
financial need," according to Uganda.
The LDCs also expressed sharp concern on the application of a necessity test in
the proposal on development of measures circulated by Hong Kong-China and New
Zealand. It raised several questions on what is meant by the
"objective" and "transparent measures".
Cuba said the original draft text circulated by Peter Govindasamy in 2009 must
remain the basis while insisting that DR cannot be dealt in isolation without
resolving the unfinished DDA issues, particularly special safeguard mechanism
and the permanent solution for public stockholding programs for food security.
Ecuador said the proposals by the proponents on DR seem to be "very
intrusive" and might compromise policy space for development objectives.
Venezuela concurred with Ecuador that the DR proposals impose burdensome
requirements on developing countries.
But Thailand, New Zealand, and several other countries welcomed the proposals
on transparency, development of measures, and administration of measures for
improving DR disciplines.
Meanwhile, India made a power-point presentation of its draft legal text on
Trade Facilitation for Services (TFS) at the WPDR meeting, seeking a
The underlying rationale for TFS, India said, is to remove the hurdles in
global trade in services on the lines of the Trade Facilitation Agreement for
goods so as to ensure that market access remains "effective" and
The TFS, India emphasized, is not about "new market access". India
explained the provisions in the 13-page draft legal text, suggesting that it is
ready to continue negotiations both bilaterally and in various groups.
Ecuador said while it is not a demandeur in services, it is willing to discuss
issues concerning the movement of short-term services providers as set out in
the Indian proposal.
Paraguay and Thailand welcomed the Indian proposal but were willing to work on
issues relating to domestic regulation disciplines in the Indian proposal.
Brazil praised the Indian proposal as "balanced" and
"reasonable", suggesting that it is ready to engage in serious
Peru said it is ready to engage in further discussions on administration of
economic needs test but cautioned that short-term results are difficult.
Venezuela and Bolivia said the TFS would impose additional burden on developing
countries and goes beyond the Article VI: 4 of GATS.
Turkey praised India for presenting a bold proposal on TFS which covers several
issues in Mode 4 and cross- border insurance. Turkey said it is ready to
support the Indian proposal.
Canada said it is still studying the Indian proposal while the European Union
welcomed the TFS suggesting the "overarching notion is valuable and
The EU suggested that substance in the Indian proposal should prevail over
form, arguing that it has large domestic regulation provisions.
On behalf of the African Group, South Africa said while it shares the
constraints the Indian services suppliers are continuing to face, the African
countries would benefit from removing hurdles in the movement of short-term
South Africa expressed surprise over the timing of the Indian proposal on TFS
against the backdrop of worsening political climate.
The African Group, according to South Africa, is concerned about several new
and potentially onerous multilateral commitments that are proposed in the
Indian proposal without any existing mandate at this juncture.
The TFS proposal is "extremely broad" and appears to be
inappropriate. Further, the enhanced transparency obligations in the Indian
proposal go beyond GATS Article III, South Africa suggested.
Instead of a development-centered proposal, the TFS actually imposed burdensome
requirements on many African countries, particularly the LDCs, South Africa
It maintained that provisions such as creation of a "single window",
resolution of appeals on a fast track, and several other elements are costly
and difficult for African countries to implement at this juncture.
South Africa reminded India that the proposed TFS cannot be fitted into the
Trade Facilitation Agreement- template that centered around customs procedures
while questioning whether it will offer any long-term gains for African
countries who are net services importers, according to negotiators, who asked
not to be quoted.
Nevertheless, the African Group said it will work with India for addressing issues
concerning the movement of short-term services providers in Mode 4 in the TFS
In short, India's proposal on TFS was welcomed more by developed and several
advanced developing countries.
Many African and other developing countries remained concerned about the Indian
proposal on grounds that it would impose burdensome commitments at a time when
they are net importers of services.