Services in Focus

Outgoing chair of the World Trade Organization’s Council for Trade in Services Ambassador Syahril Syazli Ghazali of Malaysia is urging WTO members to intensify engagement on outstanding issues.

Such issues include the mandated services waiver for least-developed countries while exploring flexibilities to achieve potential deliverables for next year’s 14th Ministerial Conference in Younde, Cameroon, said people familiar with the developments.

Ambassador Ghazali noted the robust growth in trade in services, with global services trade posting a strong 10 percent year-on-year increase in the third quarter of 2024 at a meeting of the Council. In several metrics, the rise in services exports and growth in imports across regions reflected the growing demand for diverse services.

Following the mandate reached at MC13 last year, the CTS made significant progress on two issues, especially in reinvigorating the work of the Council, where members finally agreed in principle on the prioritized topics for the evidence-based thematic sessions.

The members also endorsed the framework of questionnaire developed by the least-developed countries to facilitate the implementation ‘LDC services waiver’ which aims to provide preferential treatment to LDC services and services suppliers, as mandated by the WTO Ministers in Nairobi in 2015.

Value-Added Taxes

Several industrialized countries and some developing countries appear increasingly worried about the US plan to impose reciprocal tariffs beginning April 2, particularly in the arena of services like the value-added tax that is also called the global services tax, said people familiar with the developments.

The industrialized countries, who repeatedly projected the domestic value-added-tax as a counter to the continuation of the moratorium on levying customs duties on electronic transmissions since 1998, are now concerned that the Trump Administration could impose duties on par with domestic value-added taxes, said people familiar with the developments.

US Trade Representative Jamieson Greer, in the President’s trade policy agenda, demanded continuation of the moratorium permanently. Trade ministers agreed at MC13 that the moratorium will be terminated on March 31, 2026 or before the conclusion of MC14 unless members reach agreement on its extension.