Proposed disciplines on domestic regulation
The seven proposals discussed in the WPDR included one new text focusing on least-developed countries (LDCs) and six revised texts.
The proposals relate to how WTO members should develop and handle licensing and qualification-related measures and technical standards to ensure that these measures and standards are impartial and adequate and based on objective and transparent criteria. The proposals also cover how members should administer processes for the authorization of services suppliers, how LDCs should be exempted from applying the disciplines and how to ensure that domestic regulations do not discriminate on the basis of gender.
Some of the specific suggestions are to create a single window to streamline the licensing of services businesses and enquiry points, setting timelines for application procedures.
The WPDR met four times to accommodate comments, questions and explanations by WTO members. The final meeting concluded with strong disagreement on the need to develop new disciplines on domestic regulation. Some delegations argued that the proposed disciplines exceed what is mandated by the WTO’s General Agreement on Trade in Services (GATS).
Many developing and least-developed countries (LDCs) reiterated that the proposed disciplines would lead to additional financial and administrative burdens and reduce their capacity to meet national policy objectives, such as poverty reduction and economic growth. The African group sought clarity on the empirical and economic evidence justifying the need for new disciplines. Several developing countries said special and differential treatment concerns developing countries in general rather than LDCs only. Several members also said there is no mandate at the WTO for discussing gender equality.
Those putting forward the proposals said domestic regulation disciplines are important because licensing and qualification requirements and on-the-ground procedures often determine whether a business can enter a foreign market. They explained that the level of ambition of the proposals had been lowered to accommodate the requests and constraints of developing countries. They also clarified that the debate does not preclude working towards achieving results in other areas of negotiations at the WTO’s Eleventh Ministerial Conference in Buenos Aires (MC11) in December.
The UK’s Ambassador, Julian Braithwaite, who was elected as the new Chairperson of the Services Council on 16 June, reminded members of the need to advance work in the various areas of negotiations, as agreed in the Ministerial Declaration adopted at the 2015 Tenth Ministerial Conference in Nairobi, Kenya (paragraph 11(1)).
Trade facilitation in services (TFS)
Members continued to review the draft Trade Facilitation for Services (TFS) text by India, providing more technical comments on a range of provisions of the proposed agreement.
India said members’ comments would be addressed in the revised version that it intends to circulate shortly.
Members’ concerns at the Services Council
New concerns on services trade
- Japan – backed by the United States, Korea, Australia and Chinese Taipei – raised concerns about China’s “Cyber Security Act”, which entered into force on 1 June. Japan said it could prevent data from flowing freely and new suppliers from operating in China, and called on China to abide by its National Treatment commitments under the GATS. The US called on China to notify the measure to the Council.
China said that safeguarding cybersecurity to protect the interests of the general public was a legitimate regulatory right for each member. The new law complies with international practice and is non-discriminatory, China said. It also stated that the draft legislation had been made available for comments before its entry into force and said that it had been inspired by other members’ relevant practices.
- Qatar expressed concerns about recent measures by Bahrain, Saudi Arabia and the United Arab Emirates, which limit the ability of Qatari nationals to travel to and provide services in the Gulf, restrict the supply of services from Qatar (in sectors including transportation, tourism, communications and financial services) and prohibit Gulf nationals from accessing services in Qatar. Qatar argued these measures are discriminatory, unexpected and unjustified, and called on the members concerned to abide by their WTO commitments and obligations.
Saudi Arabia, speaking also on behalf of Bahrain and the UAE, said the measures comply with WTO law and were adopted as a result of threats posed to the countries’ essential security interests.
Turkey said it hopes for a prompt resolution of the situation in the Gulf for regional and systemic reasons, arguing that preserving a predictable multilateral trading system was crucial.
- Korea reiterated concerns about certain measures by China in tourism and distribution services that it claims are directly affecting its suppliers and breaching China’s most-favoured nation obligation and national treatment commitments.
The US said that not only Korean suppliers, but any foreign supplier established in Korea, would be affected if this discrimination was allowed. The US and Japan said it is essential that members understand the basis for these restrictions and how they comply with China’s commitments and obligations.
China again questioned the existence of the measures.
- Russia regretted having to reiterate its concerns as regards Ukraine’s reform of the unified gas transportation system enacted in November 2014, which Moscow claims to be breaching Kiev’s commitments and obligations under the GATS.
Ukraine said that this reform is consistent with WTO law and was adopted in the context of severe security challenges. It also said that it will engage in consultations in good faith with the intention of clarifying the new reform.
Operationalizing the LDC services waiver (2013 Bali Ministerial Decision)
Panama presented its notification of sectors and modes of supply where it will provide preferential treatment to LDC services and service suppliers. The notification is available here. The sectors concerned include business services (e.g. computer, rental, packaging services), tourism (travel agencies and tour guides), recreational and transport services. The LDCs group sought clarity on a few points and encouraged other members to notify preferences. A total of 51 members (both developed and developing, counting EU member states individually) have notified preferences so far.
E-commerce Work Programme
WTO members continued discussing four communications on e-commerce, and addressed a new one. Several developing countries argued against any rule-making on e-commerce in the WTO, particularly given the absence of a mandate under the WTO Work Programme. They called for developing countries to be at the centre of the debates and for the digital gap to be tackled. Other delegations argued in favour of a deliverable at the upcoming Ministerial Conference, highlighting the benefits for consumers and for micro, small and medium-sized enterprises.China presented the commercial evolution of e-payment services in its market and the applicable regulatory regime.