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TWN
Info Service on WTO and Trade Issues (Oct25/02) Geneva, 30 Sep (D. Ravi Kanth) — China has called on members of the World Trade Organization “to jointly stabilize and strengthen the global trade in services,” after the United States “unilaterally imposed so-called “reciprocal tariffs” globally that have blatantly violated the fundamental WTO principles, undermined the rules-based multilateral trading system, and threatened the legitimate interests of WTO members.” In a restricted proposal (S/C/W/477) issued on 26 September, seen by the SUNS, China said the US is the biggest beneficiary of the global trade in services since the establishment of the WTO in 1995. It is well established that the US had forced countries to agree to bring trade in services as well as trade-related intellectual property rights into the global trade remit under the Uruguay Round mandate in 1986. The US is now the “world’s largest exporter of services” with its “services exports having exceeded USD 1 trillion, representing 13% of the global total.” According to China, “from 2010 to 2024, the United States consistently maintained an average annual services trade surplus of over USD 250 billion, a figure that approached USD 300 billion in 2024.” Data compiled from governments’ trade in services suggests that “the United States remained the world’s leading trader of services in the first half of 2025, with total imports and exports reaching USD 1.024 trillion, a 5.7% year-on-year increase.” China pointed out that “in today’s interconnected global value chains, a singular focus on goods trade is misleading.” China said “the US narrative of “reciprocal tariffs” is incomplete, as it disregards its substantial and often undervalued surpluses in services trade.” The US recently imposed restrictions on the movement of short-term services providers under Mode 4 of the WTO’s General Agreement on Trade in Services (GATS). The US imposed a fee of $100,000 on H-1B non-immigrant services providers. The Trump administration’s action in the arena of services has severely damaged prospects for short-term services providers, in which India and China are the biggest suppliers of tech professionals. “It is somewhat surprising why China did not mention this latest assault on services trade by the Trump administration,” said a services negotiator, who asked not to be quoted. On 29 September, US President Donald Trump announced a 100% tariff on movies imported from foreign countries. Movies are part of audio-visual services. It is a non-tangible item and is not amenable for tariffication, said an analyst who asked not to be quoted. Writing in his Truth Social media website on 29 September, President Trump stated that: “Our movie making business has been stolen from the United States of America, by other Countries, just like stealing “candy from a baby.” California, with its weak and incompetent Governor, has been particularly hard hit! Therefore, in order to solve this long time, never ending problem, I will be imposing a 100% Tariff on any and all movies that are made outside of the United States. Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN!” Nevertheless, in its proposal, China cautioned countries “to remain vigilant against the spread of trade frictions and volatility to the services sector.” China argued that “when the United States first announced the imposition of so-called “reciprocal tariffs” on a global scale (in April), the WTO’s Global Trade Outlook and Statistics released in April had already cautioned that services trade, though not directly subject to tariffs, would inevitably be affected.” It suggested that “the WTO report revised down its forecast for global commercial services trade growth in 2025 to 4.0%, compared with a baseline of 5.1%, and to 4.1% in 2026, below the original projection of 4.8%.” Further, it said the latest WTO data suggests a marked deceleration in the global services trade in the first quarter of 2025, “expanding by only 5% year-on-year – roughly half the pace of the previous two years.” The data also suggests that “services exports from Europe and North America grew by just 3%, compared with 8% and 11% in the same period a year prior.” “These figures,” China argued, “clearly demonstrate that unilateral tariff actions and policy uncertainties gravely undermine business confidence, dampen investment, disrupt global supply chains, and aggravate the spread of trade frictions and volatility.” “The full consequences are still unfolding,” China pointed out. With the widespread application of digital technologies such as the internet, big data, and artificial intelligence, trade in services is expanding at an accelerated pace. According to WTO statistics, global exports of services reached USD 8.9 trillion in 2024, representing a 9% increase year-on-year. China provided statistics that trade in “services now accounts for 26.6% of world trade and contributes 60% of overall trade growth.” Further, it said that trade in services is expected to exceed 30% by 2040, while “creating more opportunities for developing Members and small and medium-sized enterprises to integrate into global value chains, with the share of developing Members in global trade in services surpassing 30%.” “Sustaining this momentum will continuously inject stability and certainty into the global economy,” said China. It is against this backdrop that China called “on WTO Members to jointly stabilize and strengthen global trade in services, and consolidate and enhance the open, stable, and predictable multilateral trading system.” In this regard, Beijing put forward a blueprint for members’ consideration. China’s suggestions include: 1. Ensure stable trade in services relations among Members. China said it “regretfully notes that the multilateral trading system is facing the most severe challenge since World War II.” Further, it said that “the share of global trade conducted in accordance with the WTO’s Most-Favoured-Nation Treatment principle has dropped to 72% and may decline further.” China called “on all Members to abide by the General Agreement on Trade in Services (GATS) disciplines and their commitments, uphold core WTO principles such as Most-Favoured-Nation Treatment and non-discrimination, and strive to ensure the stable operation of global trade in services within the framework of WTO rules.” 2. Foster a supportive environment for services trade. “Members are encouraged to voluntarily take measures to further reduce barriers to services trade, align with the global trends of digitalization, networking, and intelligentization, strengthen international cooperation in areas such as big data and artificial intelligence, and promote the innovative and inclusive development of global trade in services,” said China. Through mutually beneficial cooperation, Members can achieve shared prosperity and ensure services trade remains a vital engine of economic development, China said. 3. Address trade in services frictions through multilateral cooperation. China underscored the need for enhancing “the transparency of policies related to services trade, strengthen information sharing and experience exchange within the multilateral framework, and prioritize multilateral cooperation over unilateral measures in resolving trade frictions.” “Bilateral negotiations are one of the channels to ease and resolve trade frictions, but bilateral arrangements must be based on WTO rules and must not violate the WTO’s non-discrimination principle or harm the interests of third parties,” China argued. 4. Promote meaningful outcomes on trade in services at MC14 (the WTO’s 14th ministerial conference to be held in Yaounde, Cameroon in March 2026). China said “Members should adopt a flexible and inclusive approach to ensure that the WTO evolves with the times, and to achieve more development-oriented services outcomes in the WTO.” It pledged its support for “holding dialogues on issues of common interests, including financial services, environmental services, artificial intelligence, and good regulatory practices in the Council for Trade in Services, with the aim of delivering meaningful outcomes on these issues at MC14.” Lastly, China emphasized that “trade in services is a key driver of global economic recovery and growth, and its healthy development requires the concerted efforts of all WTO Members.” Beijing warned that “unilateral actions and escalating trade frictions are eroding the foundation of the multilateral trading system and weakening global business confidence.” It said “all Members should act in accordance with WTO rules, and to safeguard the stability and predictability of trade in services through openness, cooperation, multilateral dialogue, and necessary reform.” China said it “stands ready to work with all Members to advance opening-up and cooperation in the services sector, foster an innovative and inclusive open world economy, and jointly promote the healthy and stable development of global trade in services.” +
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