Info Service on WTO and Trade Issues (Dec18/05)
11 December 2018
Third World Network
Strong support for India's initiative on improving DR disciplines
Published in SUNS #8812 dated 7 December 2018
Geneva, 6 Dec (D. Ravi Kanth) - A large majority of developing and
least-developed countries, including China, on 5 December welcomed
India's initiative to "rejuvenate" and "re-energize"
negotiations at the World Trade Organization for a multilateral outcome
towards improving the disciplines on domestic regulation (DR). The
Indian initiative aims to enhance market access for the movement of
short-term services providers under Mode 4 of the General Agreement
on Trade in Services (GATS), trade envoys told SUNS.
At a meeting of the WTO's Working Party on Domestic Regulation (WPDR)
on 5 December, many countries - China, the ACP (Africa, Caribbean,
and Pacific) group, the African Group, the least-developed countries,
South Africa, Indonesia, Turkey, Cuba, Ecuador, Bolivia, Venezuela,
Egypt, and Nigeria among others - strongly supported India's initiative
for negotiating the improvements in DR disciplines.
In a direct challenge to the plurilateral proponents of improvements
in DR (domestic regulation) led by Australia and the European Union,
India proposed an initiative for improving disciplines on DR for the
supply of services through the presence of natural persons of a member
country in the territory of another member country.
Major developed countries - the EU, Australia, the US, and Japan among
others who are all strong votaries of the plurilateral outcome on
domestic regulation - remained silent during the meeting.
Negotiations at the WTO's Working Party on Domestic Regulation (WPDR)
for improvements in the DR disciplines, which come under Article VI:4
of the GATS, had remained in limbo throughout this year because of
a concerted effort by the plurilateral proponents of the informal
joint statement initiative group to hammer out a plurilateral deal
on DR disciplines.
The plurilateral proponents launched the joint statement initiative
(JSI) group at the WTO's eleventh ministerial conference in Buenos
Aires, Argentina, in December 2017, knowing full well that the WPDR
is the multilateral forum fo r bringing the improvements in DR.
Subsequently, the JSI participants which include all the developed
countries and some developing countries such as Nigeria, Egypt, Turkey
and Indonesia among others held several meetings throughout this year
and floated a draft text.
The plurilateral JSI on the improvements in DR is largely based on
the failed Trade in Services Agreement (TiSA) text which largely reflects
the interests of Canada and the United States that continue to impose
numerous DR barriers for the movement of natural persons or short-term
services providers under Mode 4 of the GATS.
Significantly, the JSI in DR coincides with the plurilateral proponents'
initiatives for new rules on electronic commerce in Mode 1 of the
GATS on cross-border services and investment facilitation in Mode
3 of the GATS on commercial presence.
The JSI plurilateral proponents, however, remain opposed to any improvements
in Mode 4 concerning the short-term movement of natural persons, which
is the most vital area of importance in GATS for developing and poorest
The plurilateral proponents want to start negotiations on both electronic
commerce and investment facilitation at the WTO's 12th ministerial
conference in Astana, Kazakhstan, in June 2020.
Against this backdrop, at the WTO's Working Party on Domestic Regulation
(WPDR), India sought to discuss its proposal "on disciplines
on domestic regulations for supply of a service through the presence
of a natural person of a Member in the territory of another Member."
Consequently, the dormant WPDR came back to life on Wednesday (5 December).
In its introductory statement at the WPDR meeting, India said that
"Mode 4 [concerning the movement of short-term services providers]
is the most important mode of export interest for most developing
countries including LDCs."
"Unfortunately, it is most neglected and therefore needs facilitation
through DR Disciplines," India emphasized.
Several studies had pointed to the gross asymmetries in the market
access in the four modes of the GATS, particularly between Mode 3
of commercial presence and Mode 4 of the movement of natural persons.
But major industrialized countries led by the US and the EU had severely
opposed market access demands in Mode 4, including demands for removing
the impediments in the DR disciplines.
India said the "disciplines on DRs are most relevant for Mode
4 service suppliers, as the issue of recognition of educational qualifications
and licenses acquired in the territory of another Member is a major
impediment to mode 4 access, especially in case of regulated professions."
Maintaining that it "acknowledges that measures relating to Qualification
Requirements (QR), Licensing Requirements (LR) and even Technical
Standards (TS) are applied by Members to achieve legitimate public
policy objectives, " India pointed out that these measures "can
also limit access to the ranks of the profession within a foreign
jurisdiction as such requirements governing the supply of services
vary widely across Members."
"Put together, the regime of DRs, covering LR [Licensing Requirements],
QR [Qualification Requirements] and TS [Technical Standards], result
in significant trade barriers for mode 4 service suppliers, in the
absence of necessary disciplines," India argued.
"Therefore," India said, "for commercially meaningful
access for mode 4 professionals, it is critical that Members ensure
that their competent authorities take account of qualifications and
licenses acquired in the territory of another Member on the basis
of equivalency of education, experience and/or examination requirements
and have adequate procedures to meet these requirements."
In several rounds of negotiations on domestic regulation since 1999,
there has been substantial progress in negotiating disciplines on
domestic regulation at the WPDR which was earlier called the Working
Party on Professional Services (WPPS).
Several submissions were made by Members for disciplines in other
regulated professional services like legal and engineering services,
India said, emphasizing that from the very beginning of DR discussions
since 1999, Mode 4 was the target for Art. VI:4 disciplines.
India said "global changes in demographics and patterns of investment
in human capital have created increased scope for international trade
in professional services."
According to India, "the scope for mutually beneficial trade
is, however, inhibited by a range of qualification and licensing requirements
"Commercially meaningful disciplines on DRs can therefore unleash
the potential for mutually beneficial trade specially in professional
services and more generally in trade in services," India argued.
India maintained that addressing "disciplines on the entire gamut
of DRs for Mode 4, especially qualification requirements and procedures,
will also help address Part "C" of the LDC Collective Request
pursuant to the LDC Services Waiver Decision related to recognition
of qualifications of LDC professionals."
India said that "a large group of Members comprising developing
countries and LDCs have been questioning the "necessity"
of DR disciplines as they recognize the difficulties which may be
faced by individual developing country Members and in particular the
least-developed country Members, in implementing horizontal disciplines
on domestic regulations."
Time has come for the WTO members to "focus on developing disciplines
on DR for Mode 4," that "is not only the key mode of export
interest for most developing countries but is also in dire need of
disciplines for commercially meaningful access."
As per the decision of the WTO's Council for Trade in Services (CTS)
dated 28 April 1999, members are required "to develop any necessary
disciplines to ensure that measures relating to licensing requirements
and procedures, technical standards and qualification requirements
and procedures do not constitute unnecessary barriers to trade in
India criticized the JSI of the plurilateral proponents on DR for
pursuing "GATS Article VI:4 Disciplines outside of the WPDR when
the WPDR, in accordance with the Decision on Domestic Regulation adopted
by the CTS on 28 April 1999 (S/L/70), is mandated to develop such
India said "as per the decision, the WPDR is required to report
its recommendations to the CTS."
India severely criticized the JSI for proposing that the non-attributed
working text on GATS Article VI:4 Disciplines being developed under
the JSI does not include any of the following commercially significant
disciplines on qualification requirements and procedures (QRP), all
of which were an integral part of the earlier work done in the WPDR:
* Verification and assessment of qualifications of foreign service
suppliers - consideration to professional experience and membership
in professional association;
* Identification of deficiencies - details of how deficiency in qualification
can be addressed by applicants;
* Examinations - through electronic means, and from home country of
In short, India said that "the GATS VI:4 mandate must be used
to develop commercially meaningful disciplines in the key area of
Qualification Requirements and Procedures (QRPs), as reflected by
the history of DR negotiations at the WTO."
"Additionally, the GATS VI:4 mandate cannot be used to multilateralise
a particular template developed in the context of some Regional Trade
Agreements [such as the failed Trans-Pacific Partnership or the failed
Trade in Services Agreement (TiSA)]".
India spoke about the drafts texts on DR that were prepared by the
chairs of the WPDR in 2009 and 2011.
The draft texts include disciplines in the five mandated elements,
namely, licensing requirements (LR) and licensing procedures (LP),
technical standards (TS) and qualification requirements (QR) and qualification
procedures (QP) for Mode 4, as compared to the "disciplines on
"authorization" along broad thematic areas in the non-attributed
working text" of the JSI group.
India said "disciplines on Licensing Procedures and Qualification
Procedures, and Licensing Requirements and Qualification Requirements
have been merged to do away with overlap between the separate sections
on LP and QP and between LR and QR, as in the earlier versions of
the texts being discussed in the WPDR."
Further, as regards disciplines on QRP, India said that its text retains
th e disciplines as contained in the earlier versions of the texts,
with one additional provision "to provide adequate opportunity
to developing country Members to negotiate accession to existing agreements
pertaining to recognition, pursuant to GATS Article VII and the various
provisions built in the GATS for increasing trade opportunities for
developing countries (paragraph 20 of S/WPDR/W/61)."
India said that its proposed "draft for discussion on DR disciplines
for Mode 4 service suppliers" is aimed at reinvigorating "the
WPDR discussions and welcome constructive suggestions to take the
India also requested the WTO Secretariat to "do a briefing session
on the history of DR negotiations, much of which relate to professional
services, and the past submissions on DR disciplines to guide the
membership in fulfilling the mandate pursuant to Article VI:4 of the
GATS, in its letter and spirit."
At the meeting, services negotiators of the ACP (Africa, Caribbean,
and Pacific) group, the African Group, the least-developed countries,
Ecuador, Cuba, Bolivia, Indonesia, Turkey, Nigeria, Egypt, and Thailand
among others supported India's initiative for re-starting work to
improve the disciplines in the domestic regulation.
China said that India's initiative presents a multilateral framework
for improving the DR disciplines, while South Africa welcomed India's
proposal, suggesting that it would need further discussions.
Significantly, services negotiators from the United States, the European
Union, Australia, and Japan among others remained utterly silent during
the brief discussion on the Indian proposal.
In conclusion, it is clear as daylight that the developed countries
are determined to pursue plurilateral initiatives to safeguard their
interests and deny market access in areas of interest to the developing
countries such as domestic regulation in services, said trade envoys,
who asked not to be quoted.