The outgoing chair of the World Trade Organization’s Council for Trade in Services presented many recommendations yesterday for “reinvigorating” the work in services trade, which appears to have become a casualty due to the pursuit of joint statement initiatives instead of multilateral processes, said people familiar with the developments.
In a seven-page restricted report (Job/SERV/CTS/32) issued on Monday and seen by WTD, outgoing chair Ambassador Tsvetelina Georgieva Dimitrova said “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.”
The outgoing chair expressed confidence the incoming new chair, Ambassador Syahril Syazli Ghazali of Malaysia “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,” she said, following her sustained consultations with Members on five specific mandates arising from the Abu Dhabi Ministerial Declaration.
Mandate In paragraph 18 of the declaration, which was agreed in Abu Dhabi on March 2, 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 items: (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 May 27-29 to elicit their views on the five topics. 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 said specific suggestions were made for future CTS work.
Without indicating the number of countries, she said “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 open secret that major industrialized countries, including China, want to push trade in services pertaining to environmental services.
The outgoing 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 for trade-related climate-measures by major industrialized countries as well as China, the chair said “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.”
According to the chair, “several delegations mentioned that the cost of remittances was an important issue, particularly for developing Members.” India had pressed for discussion on cost of remittances, but the United States 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, 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.”
Domestic Services JSI Despite the joint statement initiative 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 rulemaking in bilateral and regional settings.”
The chair said “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 in Mode 4 concerning short-term services providers by the WTO Secretariat, the issue was kept in the cold storage for many years.
Against this backdrop, it was observed “the long-standing proposal that the CTS agree to update the Secretariat Note on mode 4 was also highlighted.”
Commenting on Secretariat research initiatives, “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.”
Topics Suggested
According to the report, “the following topics were additionally suggested by individualdelegations 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 and
(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.As per the MC13 mandate, ministers stated that they “note our instructions in Paragraph 8 of the MC12 Outcome Document concerning operationalization 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 “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.”
In the way-forward, the outgoing chair said, “I would like to take this opportunity to make a special appeal with regard to the issue of the operationalization 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,” the chair emphasized.
Comments
No comments on this item Please log in to comment by clicking here