Acceptance by Brazil of Fifth Protocol on Financial Services

Brazil reported to the Council for Trade in Services on 18 March that it was ready to give legal effect to its financial services commitments annexed to the Fifth Protocol of the WTO’s General Agreement on Trade in Services (GATS). The Council reopened the protocol, paving the way for Brazil to deposit its instrument of acceptance with the WTO Secretariat on 18 March. Brazil's commitments on financial services are effective from this date and have become part of Brazil's specific commitments on services. Brazil was the only WTO member yet to have ratified the GATS' Fifth Protocol, which dates back to December 1997.

Implementation of Nairobi decision on LDC services waiver

The Council for Trade in Services reviewed progress on operationalizing the least-developed countries (LDCs) services waiver, in line with the instruction from the Nairobi Ministerial Conference to make this item permanent on its agenda. The Council approved members' notified preferences to LDCs that go beyond market access¹ (Article XVI of the GATS). By 18 March, 50 WTO members (counting EU member states individually) had notified services sectors and modes of supply where they will be granting preferences to services and services suppliers from LDCs.

For more information on the notifications under the LDC services waiver, see here.

Review of exemptions to most-favoured nation obligation (non-discrimination)

WTO members agreed to start, at the next services meeting, a periodic review of the exemptions to the most-favoured-nation (MFN) treatment obligation under the GATS, which they have listed in MFN exemption lists. Under the MFN obligation, WTO members cannot normally discriminate between their trading partners.

Negotiations on domestic regulation, market access and GATS rules

Canada and Australia announced their intention to withdraw the proposals they had put forward in the run up to the December Nairobi Ministerial Conference (MC10) to increase "transparency" in members' domestic regulation. These proposals did not gain consensus among the WTO membership, and were thus not put before ministers in Nairobi for formal decision. However, India announced its intention to maintain its pre-Nairobi proposal on increasing transparency in members' procedures for the temporary cross-border movement of professionals and other persons supplying services (mode 4).

Delegations agreed to restart work with respect to the full mandate of Article VI:4 of the GATS regarding domestic regulation. Some members also called for the resumption of market access negotiations.

Members also started reflecting on how to jumpstart the GATS rules negotiations, namely on government procurement, subsidies and emergency safeguard measures. In the run up to MC10, members had acknowledged that these negotiations were not mature enough to be taken up by ministers in Nairobi.

Learn more about WTO negotiations on trade in services here.

Members' concerns on certain services measures

> India – barriers to entry via mode 4

India presented to the Council its assessment of some of the barriers that its services providers are, or may be, facing when entering the United States, the United Kingdom and Canada through mode 4.

The United States said that the proper forum to discuss the increased fees on certain applicants for L-1 (intra-corporate transferees) and H-1B (professionals engaged in specialty occupations) non-immigrant temporary working visas is the WTO's Dispute Settlement Body, as on 3 March India requested consultations with the US on that measure. More information here.

The United Kingdom said that the UK's Migration Advisory Committee (MAC) is an independent consultative body and the MAC recommendations that India is referring to are of a consultative nature and are neither a governmental measure nor a draft measure.

Canada said that India had misunderstood Canada's re-branded mobility programme, which had in fact not introduced any new restrictions.

> Russia – gas transportation system

Russia reiterated its claims that measures related to the reform of the unified gas transportation system of Ukraine continue to violate Ukraine's obligations under the GATS of non-discrimination (most-favoured-nation treatment principle) and equal treatment of national and foreign suppliers (national treatment principle) and its commitments under the GATS.

Ukraine said that its measures comply with its WTO commitments and obligations, particularly as Article 19 underscores that the gas market in Ukraine is open to network users regardless of their country of origin.

> Canada – online publishing services

Canada raised concerns over new administrative rulings adopted by the Chinese government in March related to online publishing services. Canada claims that under this new law, foreign firms are prohibited from publishing online services through either a joint venture enterprise or a wholly foreign-owned enterprise, while foreign companies, organisations or individuals are authorized to cooperate on a project–by-project basis with a purely Chinese firm subject to government approval. Canada asked whether China intended to notify the measure to the Council.

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Note:  back to text
Members can implement preferential treatment related to market access (Article XVI of the GATS) once they have notified the Services Council. Preferential treatment regarding any other measure is subject to approval by the Council.