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Info Service on WTO and Trade Issues (Jun24/09) Geneva, 18 Jun (D. Ravi Kanth) — The outgoing chair of the World Trade Organization’s Council for Trade in Services (CTS) on 17 June presented many recommendations for “reinvigorating” the work on trade in services, which appears to have become a casualty due to the pursuit of the controversial plurilateral Joint Statement Initiatives (JSIs) instead of multilateral processes, said people familiar with the development. In a seven-page restricted report (Job/SERV/CTS/32) issued on 17 June, seen by the SUNS, the outgoing chair, Ambassador Tsvetelina Georgieva Dimitrova of Bulgaria, said that “all members underscored their commitment to reinvigorating the work of the Council, and many highlighted the value of advancing work on trade in services more generally, as a reflection of the economic importance of services and trade in services.” As she steps down from office soon, the outgoing chair expressed confidence in the incoming chair, Ambassador Syahril Syazli Ghazali of Malaysia, who she said “will ably steer the work of the Council in the months ahead.” “Various Members noted that, as per the Ministerial mandate, services work needed to focus on the development dimension and be responsive to the needs of developing and least-developed members,” the chair said, following her sustained consultations with members on five specific mandates arising from the Abu Dhabi Ministerial Declaration. In paragraph 18 of the Abu Dhabi Ministerial Declaration, which was adopted at the WTO’s 13th ministerial conference (MC13) in Abu Dhabi on 2 March, trade ministers agreed on the following mandate on trade in services: “Members recognise the role and importance of services to the global economy as it generates more than two-thirds of global economic output and accounts for over half of all jobs. Services play a critical role in providing a stable environment for economic growth and development and tackling global challenges. We acknowledge the need to facilitate the increased participation of developing Members, including LDCs, in global services trade paying particular attention to sectors and modes of supply of export interest to them. We acknowledge the importance of the work undertaken in the Council for Trade in Services (in regular and special session) and its subsidiary bodies and commit to reinvigorate work on trade in services within the mandate of the GATS and other existing mandates including through further thematic, evidence-based discussions.” Based on this mandate, the outgoing chair held discussions with members on the following five topics: (1) work on trade in services; (2) challenges when confronting crises; (3) WTO reform; (4) response to pandemics; and (5) the LDC services waiver. Ambassador Dimitrova held consultations with around 75 members on 27-29 May to elicit their views on these five topics. She said that during these consultations, “it was suggested that synergies should be built with other relevant WTO work, notably when it came to the role that services played in tackling global challenges; this could be a cohesive theme around which discussions could be organised.” She noted that “many delegations indicated their openness to addressing any issue that Members put forward, including by holding thematic sessions and seminars, as long as the topics to be considered were trade-related and fell within the mandate of the Council.” Emphasizing that “work had to continue to be Member-driven,” she made specific suggestions for future work in the CTS. Without indicating the number of countries, she said that “many members mentioned trade in environmental and related services, and the green transition was mentioned by many members as an area of great interest.” It is an open secret that the major industrialized countries, as well as China, want to push trade in services, in particular that pertaining to environmental services. In her report, the outgoing CTS chair said that “it was observed that relevant discussions were ongoing elsewhere in the WTO, notably under the Committee on Trade and Environment and the plurilateral Trade and Environmental Sustainability Structured Discussions (launched by the European Union), and that services- specific issues and information could be brought to the attention of CTS delegates.” Amidst the growing calls by major industrialized countries as well as China for discussions on trade-related climate measures, the chair said that “it was noted by some delegations that environmental services were also relevant to the discussion on responding to crises, namely with regard to climate emergencies.” COST OF REMITTANCES According to the chair, “several delegations mentioned that the cost of remittances was an important issue, particularly for developing Members”. India had pressed for discussions on the cost of remittances, but the US appears to have blocked it, said people familiar with the discussions. Without naming the countries, Ambassador Dimitrova said, “however, while some Members called for engaging in further discussions on this topic, including based on contributions from other International Organisations and the private sector, others underscored that the trade relevance of this issue and its link to the CTS mandate were, at best, limited, and that it was not clear what role, if any, the WTO could play in trying to reduce the cost of remittances.” The chair said “one delegation noted that, although the cost of remittances was set by private actors, government measures also mattered, for instance, when they set limits on applicable Merchant Discount Rates.” Also, she said several members “stressed that the best forum for any discussion on the cost of remittances was the Committee on Trade in Financial Services (CTFS) and noted that it was premature to address the issue in the CTS.” Despite the JSI on domestic regulation in services, which allegedly undermined the multilateral work program on domestic regulation in services, the chair noted that “a number of delegations suggested discussing the Services Domestic Regulation disciplines, for instance, by having an exchange of information on Members’ best practices, or undertaking and discussing research on relevant rule-making in bilateral and regional settings.” DIGITAL TRADE IN SERVICES The chair said that “a number of Members mentioned discussing work by the Secretariat, especially when related to the development dimension or digital trade issues.” More importantly, members sought that “the Secretariat be mandated to update all its earlier sectoral and modal Background Notes, which would be a public good.” Despite repeated calls by developing countries for an update by the WTO Secretariat on Mode 4 concerning short-term services providers, the issue has been kept in “cold storage” for many years. Against this backdrop, it was observed that “the long-standing proposal that the CTS agree to update the Secretariat Note on mode 4 was also highlighted.” Commenting on the WTO Secretariat research initiatives, the chair said “one delegation said that it would be useful to have advance notice of the topics that would be examined, while another called for Members to be involved in the choice of topics and co-authors.” According to the chair’s report, “the following topics were additionally suggested by individual delegations as areas for further work in the CTS: (i) trade in services and Artificial Intelligence (AI) and AI governance; (ii) trade in digitally delivered services; (iii) electronic payments, which could be addressed within the broader rubric of inclusivity and finance and development; (iv) APEC’s San Francisco principles on integrating inclusivity and sustainability into trade and investment policy; (v) measures affecting trade in services as reflected in Trade Policy Reports and Monitoring Reports; (vi) technical assistance and capacity building, as key development components, and examining how the Council’s work could help; (vii) resuming exploratory discussions on market access in the Special Session of the CTS, to create a knowledge basis on which possible future negotiations could build.” LDC SERVICES WAIVER As per the MC13 mandate, ministers stated that they “note our instructions in Paragraph 8 of the MC12 Outcome Document concerning operationalisation of decisions taken in favor of the LDCs and acknowledge the work done so far. We instruct the relevant bodies to continue their work, and the General Council to report back to our next Session on progress.” However, it remains “a blot” that this long mandated-issue has been stalled because of opposition from a major industrialized country, said a person familiar with the discussions. In her report, the chair said “members generally underscored the importance of the LDC services Waiver and expressed strong support for continued engagement on this issue.” Ambassador Dimitrova said that “several noted the importance and urgency of making concrete progress by MC14; this could be facilitated by holding informal meetings and consultations, putting forward questions for discussion, and setting out action plans. The importance of being mindful of the capacity constraints that many LDC delegations faced was underscored.” On the way forward, the outgoing CTS chair said, “I would like to take this opportunity to make a special appeal with regard to the issue of the operationalisation of the LDC Waiver.” “What I heard in the course of my consultations was a collective desire to advance on this issue, and to do so quickly,” she emphasized. +
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