SERVICES

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LDC Services Waiver

At the meeting on 12 October, the WTO group of least-developed countries (LDCs) called on the Services Council to review the operation of the preferential treatment notified by 24(1) WTO members in favour of LDC services and services providers. The notifications relate to the “LDC Services Waiver” approved by ministers at the 2011 WTO Ministerial Conference, which gives WTO members a waiver from their obligation of non-discrimination under WTO rules to support the development needs of LDCs through increased participation in trade. The list of notifications is available here.

On behalf of the LDC group, Chad said that despite increasing revenue generated from tourism exports — USD 18 billion in 2017 from USD 10 billion in 2010 — LDCs' share of world services exports in 2017 remained critically low, at 0.6%. LDCs highlighted once again the importance of services trade as a source of revenue and for realizing their social and sustainable development objectives.

LDCs called on members to reflect on ways to support the implementation of the waiver and to share information on their technical assistance programmes to promote LDC participation in services trade.

E-commerce

Several WTO members shared information about technical assistance programmes they carry out in developing countries related to the digital economy, including to address the digital divide between developed and developing countries. One member provided information about a new legislative initiative related to e-commerce. Some members underscored that the WTO discussions on e-commerce were not intended for rule-making and called on members to focus on assessing the challenges faced by the poorer economies when participating in e-commerce.

A representative from the United Nations International Telecommunication Union announced the endorsement in July of Best Practice Guidelines on New Regulatory Frontiers by 93 member states, which aim at supporting innovation and progress throughout the digital transformation.

Services suppliers seeking to access foreign markets through “mode 4”

A seminar held at the WTO on 10 October 2018 provided an overview of the scope of mode 4, offering also a snapshot of the specific commitments undertaken by WTO members. Participants also discussed the challenges of measuring mode 4 trade and its economic impact and mode 4 access and pertinent regulatory disciplines negotiated in regional trade agreements. The regulatory measures that may impact mode 4 commitments scheduled(2) by WTO members were also discussed, along with the challenges of realizing the benefits that stem from existing mode 4 bindings. Presenters included WTO members, the WTO Secretariat, academia, the private sector and other international organizations.

Members' concerns about certain services-related measures

Cybersecurity — measures by China

The United States and Japan — supported by Australia, Canada, the European Union, New Zealand and Chinese Taipei — reiterated concerns about existing and proposed cybersecurity measures by China. Concerned members fear these measures could significantly impair cross-border transfers of even routine information and would place foreign suppliers operating in China at a competitive disadvantage compared to their Chinese counterparts.Members asked China to provide further information and responses to the concerns raised.

China said it has addressed members' concerns and questions in the past and asked that each member's right to regulate to safeguard cyberspace sovereignty and national security be respected, particularly as other members' related regulations may also be a source of concern. It added that its legislative process was ongoing and that stakeholders, including foreign ones, have been consulted throughout.

Cybersecurity — measures by Viet Nam

The US and Japan — backed by Australia, Canada, the EU, New Zealand and Chinese Taipei — reiterated their concerns about the cybersecurity law recently adopted by Viet Nam.  The law imposes data localisation and local presence requirements on certain service suppliers which, according to these members, add disproportionate financial and administrative burdens on foreign services providers, thus placing them at a competitive disadvantage compared to their Vietnamese counterparts.

Viet Nam said that the law was designed to meet legitimate national public policy objectives related to cybersecurity in a WTO-compatible manner. Viet Nam also said its legislative process has been open and transparent.

Request for transparency

For increased transparency, India requested that the EU notify to the Council its new General Data Protection Regulation aimed at protecting data privacy across the EU, which came into force on 25 May 2018. 

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Notes

  1. Counting the European Union as one. Back to text
  2. WTO members' schedules of commitments contain market access commitments and exemptions on several services sectors at the same time. Back to text

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