Info Service on WTO and Trade Issues (Nov17/09)
10 November 2017
Third World Network
No outcome likely at MC11 on domestic regulation in services
Published in SUNS #8571 dated 9 November 2017
Geneva, 8 Nov (D. Ravi Kanth) - A large majority of developing and
least developed countries rejected on Tuesday (7 November) the revised
draft negotiating proposal for an outcome on disciplines on domestic
regulation of trade in services at the upcoming World Trade Organization
ministerial meeting in Buenos Aires.
In rejecting the draft negotiating proposal, the large majority of
developing and least developed countries said the draft is replete
with divergences among the sponsors and is misinterpreting GATS Article
VI.4, participants told SUNS.
Members of the African Group, the ACP (Africa, Caribbean, and Pacific)
group, the least-developed countries (LDCs), India, Bolivia, Cuba,
and Venezuela and several other countries opposed the proposal circulated
by the sponsors for an outcome on domestic regulation at the Buenos
Aires meeting beginning on 10 December.
The United States also rejected the joint proposal circulated by the
sponsors on 7 November seeking improvements on several areas concerning
administration of measures, transparency, technical standards, development
of measures, gender equality, and necessity test.
The sponsors include Argentina, Australia, Canada, Chile, Colombia,
Costa Rica, the European Union, Hong Kong (China), Iceland, Israel,
Japan, Kazakhstan, Korea, Liechtenstein, Mexico, Moldova, New Zealand,
Norway, Switzerland, Chinese Taipei, Turkey, Ukraine, and Uruguay.
At a meeting of the Working Party on Domestic Regulation on 7 November,
the sponsors said their revised draft Job document (Job/Serv/272/Rev.1)
circulated on 7 November took on board the concerns raised by several
members on the specific improvements on domestic regulation.
The sponsors said they were encouraged by "the level of engagement
on the proposed Disciplines on Domestic Regulation, particularly following
the circulation of the consolidated text JOB/SERV/268."
The sponsors said they "have taken note of the comments Director-General
Azevedo delivered in Marrakesh on the need to intensify work on domestic
regulation as a prospective deliverable for MC11 [eleventh ministerial
conference in Buenos Aires], and in particular the need for proponents
to address questions and concerns."
The sponsors maintained that, following the last meeting of the Working
Party on Domestic Regulation on 2-4 October, they made intense efforts
to reach out to a broad range of members.
Their latest revised draft text "responds to concerns and accommodates
text proposals from other Members."
The proposed improvements in the draft revised text aim at simplifying
the disciplines on domestic regulation in services.
The changes in the revised draft, among others, include the creation
of one nodal authority in each country for applying relating to licensing
requirements and procedures, qualification requirements and procedures,
and technical standards affecting trade in services where specific
commitments are undertaken by members.
The revised draft text, according to the sponsors, reveals how they
have accommodated changes in their original proposal for improving
the language in the general provisions, administrative measures, transparency,
technical standards, and development of measures.
The draft text also includes a proposal from Argentina, Australia,
Albania, Canada, Chile, Colombia, the European Union, Iceland, Kazakhstan,
Liechtenstein, Moldova, Montenegro, Norway, Panama, and Uruguay for
an outcome on gender equality.
Several countries - Chile, Hong Kong (China), Moldova, Peru, New Zealand,
and Switzerland - proposed language for an outcome on "necessity
test" under which each member is required to ensure that measures
relating to authorization for the supply of services are not burdensome.
In one of the sharpest critiques of the proposal, the African Group
said it is encouraged to "hear so many new voices join this conversation
and express similar views and concerns as the African Group has been
doing for the last eight months."
On behalf of the African Group, Rwanda said their "views and
concerns are systemic", underscoring the need for "a deeper,
more fulsome, conceptual discussion on GATS Article VI.4."
Article VI.4 of the GATS (General Agreement on Trade in Services)
requires the Council for Trade in Services, or appropriate bodies
the Council might establish, to develop any necessary disciplines
so as to ensure that measures relating to qualification requirements
and procedures, technical standards and licensing requirements do
not constitute unnecessary barriers to trade in services.
The African Group maintained that it cannot be "expected"
to resolve numerous divergences in the draft text "in one month
when the entire genesis of the proposals and consolidated texts are
problematic, and there is no common understanding and agreement on
the GATS Article VI.4 mandate."
It maintained that "the GATS Article VI.4 mandate has been misinterpreted
and imprecisely operationalized in the consolidated texts and proposals
we have on the table today."
"One of their most fundamental concerns," according to the
African Group, "is how the proposals create a framework to facilitate
ability of foreign governments, and their service providers, to intervene
more directly in the future, in our domestic policy-making processes.
It is the concept of, and implications for our governments, on the
sovereign "right to regulate" as it is reflected in JOB/SERV/272."
Further, "too much emphasis is being placed on the institutional
and procedural approach to domestic regulation," the African
More disturbingly, the draft text circulated by the sponsors is based
on "an underlying assumption that there is a one-size-fits-all
approach or model to regulation," the African Group said.
"In the short time that is left to MC11, it is not possible to
bridge historically sensitive matters because no amount of best endeavour
language or transition periods being characterized as Special and
Differential Treatment could make up for taking away sovereign right
of African governments to regulate," the African Group maintained.
Lastly, the African Group said, members must move "away from
texts that have cherry-picked some issues over others, and start assessing
how proponents intend to address the African Group's concerns and
what the starting point for discussions will be when we come back
from Buenos Aires."
India said it had already sought several clarifications on the draft
text suggesting that it remains concerned that the text is not in
accordance with the texts issued by the chairs in 2009 and 2011.
The US said the draft text on which members are interacting cannot
be taken to Buenos Aires because of sharp divergences. The US said
an outcome for improving the disciplines on domestic regulation cannot
be presented to trade ministers given the differences on almost all
issues in the text, according to a negotiator present at the meeting.
In short, the writing on the wall is clear that there cannot be any
outcome on disciplines on domestic regulation at Buenos Aires, given
the overwhelming opposition from members across all sides, a participant
said after the meeting.