TWN Info Service on WTO and Trade Issues (May17/08)
8 May 2017
Third World Network
India's TFS proposal gets little support
Published SUNS #8456 dated 5 May 2017
Geneva, 4 May (D. Ravi Kanth) - Members of the African Group and
least-developed countries on Wednesday (3 May) raised several systemic concerns
over India's draft negotiating proposal for facilitating trade in services at
the World Trade Organization.
In raising their systemic concerns, these members conveyed unmistakably that it
was difficult to discuss the proposal due to lack of mandate as well as in the
prevailing international political climate, services negotiators told the SUNS.
Major developed countries such as the United States, the European Union,
Australia and Canada among others also expressed skepticism in varying degrees
over the Indian proposal suggesting that the provisions in the TFS (trade
facilitation in services) proposal are not ripe for discussion at this juncture,
said several participants who asked not to be quoted.
Two countries - Turkey and Switzerland - welcomed India's proposal for starting
discussions while Korea reminded India that there could be many more trade
facilitation elements such as e-commerce and investment facilitation.
India however remains opposed to both e-commerce and investment facilitation as
sought by China, Brazil, Argentina, Korea, and Australia among others.
But, in an unusual development rarely witnessed during a negotiating session,
the chair for the Doha negotiating body for services Ambassador Hector Marcelo
Cima from Argentina gave the floor to the head of the WTO's Services Division
Abdel-Hamid Mamdouh to comment on India's TFS proposal.
Despite sharp concerns raised by many developing and developed countries on
India's TFS proposal, Mr Mamdouh apparently praised India's proposal, saying
"we have not seen lively discussion like this for some time,"
according to participants present at the meeting.
"From an institutional point of view, it [India's TFS proposal] is very
refreshing," Mr Mamdouh said, suggesting that "a lot of issues have
been raised of which there is a factual background within the
Secretariat," and "in situations like this, (as) in prep[aration] for
the Uruguay Round, the acquis to this kind of discussion is having an open mind
and avoiding an all-or-nothing approach."
"A lot of rich elements [in the Indian proposal] are here; and what helps
is finding the right methodology - and structure of a discussion - and taking
this on a thematic basis helps to clarify a lot of the conceptual gaps that are
there [in the proposal]," the WTO official maintained.
"There is a lot of energy - very important but I would suggest this would
not be seen as the end of the line," Mr Mamdouh said.
During the three-hour special negotiating session, convened to discuss India's
TFS proposal, an Indian official maintained that the proposal which is modelled
on the lines of the Trade Facilitation Agreement (TFA) for goods, is not about
new market access.
India said the proposal which is being introduced for the third time after it
was discussed during the meetings of the Working Party on Domestic Regulation
and the WTO's Council for Trade in Services contains issues on facilitation
that ought to apply to all sectors even if members have not taken prior
TFS, India argued, should not be construed as a vehicle for market access and
services liberalization but as an attempt for ensuring that existing
commitments are meaningful, according to those present at the meeting.
In the face of increasing linkages being drawn in the Indian proposal for
simplifying cross-border services in Mode 1 of the General Agreement on Trade
in Services (GATS), India said the improvements sought in cross-border services
are not about e-commerce.
The Indian official also suggested that the use of the word
"immigration" by some members was misleading as the TFS proposal is
seeking only improvements in Mode 4 of temporary movement of short-term
On behalf of the African Group, Rwanda raised three broad concerns. They
include (i) lack of mandate, (ii) overly ambitious scope, and (iii) lack of
The Indian proposal, according to Rwanda, contains few issues that are covered
by the mandate and includes many new issues which do not fall under the Doha
The scope of the TFS proposal is extremely broad while the TFA is limited to
customs procedures that cannot be extended to the entire new Services
More important, on balance, the African Group said the core issue is
agriculture given its important role in employment generation.
"In the absence of a discernible progress on elimination by developed
countries of harmful subsidies that distort market prices - which undermined
agriculture in Africa since many decades - and a lack of progress on the
permanent solution for public stockholding programs for food security, we take
a pragmatic view that there are extremely minimal realistic prospects for
taking up the TFS," Rwanda said emphatically, according to a negotiator,
who asked not to be quoted.
The African Group also maintained that there is little or no chance of the TFS
delivering on Mode 4 in the current international climate.
Bolivia said that the TFS proposal will raise systemic concerns, suggesting
that there is no mandate to discuss issues in the Mode 1 concerning
Canada issued a mixed comment, viewing TFS as a bold concept, suggesting that
TFA was about trade in goods and domestic regulation (DR) is about services.
India wants to apply both TFA and DR, Canada suggested. Canada said sectoral
approaches would be better at this juncture.
South Africa concurred with what Rwanda said about the overly ambitious scope
and lack of mandate for discussing India's TFS at this juncture.
Apparently, South Africa said it is not in a position to agree with the Indian
proposal given the commitments it undertook during the previous Uruguay Round
under an apartheid regime.
Further, India's TFS proposal will widen the differences in commitments and
obligations as it would reduce the scope for applying the right to regulate
issues that fall in the domain of domestic policy-making.
South Africa reminded India that the DDA was launched on the promise of helping
and assisting developing countries to integrate into the global trading system.
The developing countries, according to South Africa, were promised that the
existing inequities, particularly in agriculture, will be addressed.
After 16 years of negotiations, there is no serious attempt to remove/reduce
seriously trade-distorting domestic subsidies, South Africa said, adding that
its participation in the services negotiations will hinge on the outcomes in
agriculture, particularly in the reduction of trade-distorting domestic
South Africa said it continues to have profound concerns about the Indian
proposal as it goes well beyond the DDA, including the provisions in Article 19
of the GATS as well as Annex C of the Hong Kong Ministerial Declaration.
Moreover, at a time when countries remain opposed to both Investment
Facilitation and E-commerce, the Indian proposal is raising these same new
issues in a different context, South Africa said.
India's TFS proposal, according to South Africa, includes Modes 2 and 3 as well
as elements of e-commerce.
It reminded India about paragraph 34 of the Nairobi Ministerial Declaration
which has acknowledged that some members do not agree to identify or discuss
new issues for negotiations.
In short, South Africa said while it would consider improvements in Mode 4 as
part of a development round, the improvements sought in Modes 1, 2, and 3 in
the Indian proposal and by including new issues lack an overall mandate.
On behalf of the least-developed countries, Uganda raised fundamental concerns
on India's TFS proposal while welcoming the improvements in Mode 4.
Uganda said "trade rules are primarily designed to ensure market access,
and not directly defined to promote efficiency or social welfare,"
suggesting members are concerned about adoption of disciplines that are highly
intrusive in the domestic domain.
Uganda said the LDCs which are the weakest members of the global trading
organization will only adhere to ministerial decisions, and declarations, and
Uganda said what is proposed by India in the TFS has no "MANDATE",
suggesting that the LDC group seeks improvements in the Mode 4 for assisting
its services providers.
But the Indian proposal could initiate the negotiations on e-commerce
"with neither an explicit mandate from our ministers, nor consensus from
all members," Uganda said.
For LDCs, issues such as duty-free and quota-free market access, rules of
origin, cotton, services waiver as contained in the mandate along with
trade-distorting domestic subsidies in agriculture are vital and not TFS that
has no mandate, Uganda said.
Several other countries such as Cuba and Venezuela also expressed the same
concerns while Kenya asked India to clarify how the issues in TFS could be
negotiated without a mandate, according to participants present at the meeting.
Argentina and Brazil welcomed India's proposal suggesting that they are ready
to discuss the provisions while China sought clarifications on technical
The US, the EU, and Australia among others made ambiguous statements on the
Indian proposal. The US acknowledged that the current environment has made
known sensitivities harder to achieve, arguing that India's proposal will take
a long time for any resolution.
In crux, India has made itself vulnerable by introducing the TFS in the Doha
services negotiating group after adopting strong positions on e-commerce, and
By raising TFS at this inappropriate time, India is unwittingly undermining the
likely outcomes on the permanent solution for public stockholding programs for
food security and the special safeguard mechanism for developing countries,
trade negotiators said.