SERVICES

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Council for Trade in Services (CTS)

Notifications

Members engaged in a discussion on how notification of services-related measures might be improved, particularly with regards to transparency.  Several delegations offered their support for the idea of focusing on issues such as sharing examples of best practices, getting capital-based officials and the private sector more involved in the notification process, allowing sufficient time for delegations to analyse notifications, and establishing a central portal for notifications.  Others were similarly supportive but stressed the need to consider capacity constraints.

Operationalization of the LDC Services Waiver

Meeting on 21 March, the chair of the CTS, Ambassador Alfredo Suescum (Panama), referred to suggestions from the LDC Group at the WTO regarding possible elements for a process to review the operation of notified preferences in favour of LDC services suppliers.  The review process was mandated under the 2015 Nairobi Decision on Implementation of Preferential Treatment in Favour of Services and Service Suppliers of LDCs and Increasing LDC Participation in Services Trade.  The 2015 Decision continues a 2011 waiver allowing WTO members to grant more favourable treatment to LDC service suppliers until 31 December 2030. 

The chair noted that members agreed to hold a dedicated meeting to exchange information as part of the review, with several members stressing the need for a broad exchange covering the full scope of trade opportunities available to LDC services suppliers.  The chair said he has discussed with the LDC Group the format, date, content and overall organization of the dedicated meeting, and the LDC Group has started to consider options and to consult with other members on the matter.

Senegal, speaking on behalf of the LDC Group, said the group was still hoping to hold the dedicated review meeting in the autumn. Work has begun on engaging with other members on the structure of the dedicated meeting.  Senegal said the expectation is the review would provide an opportunity for information sharing on how members are building awareness of, and increasing access to, LDC preferences and establishing support programs for these purposes.

Several delegations took the floor to underline the importance of the waiver and/or making the dedicated meeting a success.  India noted it was the only developing country member that had committed to waiving visa fees for LDC services suppliers, with more than 48,000 such visas already having been granted to LDC applicants.  The International Trade Centre also briefed members on its initiatives related to services trade and the LDC waiver.

Work programme on electronic commerce

The United States updated members on a cooperation program it established with Lao PRD, including three digital forums the two jointly organized in order to bring private and public sector members in Lao PDR together to discuss digital economy issues. 

China briefed members on a new law which entered into force earlier this year regarding consumer protection and liability for services provided via electronic platforms.  Australia outlined its national strategy for the future of technology, which addresses skills development, better government delivery of digital services, infrastructure and cybersecurity.

Several members (Senegal for the LDC Group, South Africa for the African Group, India, China, Malawi) underlined the importance of continuing and reinvigorating discussions in the WTO's work program on electronic commerce and maintaining the multilateral nature of the discussions.  Both South African and India said the discussions should be exploratory in nature and that it was premature to consider negotiating WTO rules on e-commerce considering the asymmetries between members in the sector. 

Cybersecurity measures of China

Japan voiced its concerns regarding proposed implementing measures for China's new Cybersecurity Law.  Japan said the measures contained worrisome provisions on matters related to data localization, security assessments on cross-border transfer of data as well as vague definitions for terms such as "critical data" and "critical information infrastructure."  Japan said it continues to bring the matter before the CTS since the measures as currently drafted have a bearing on the rights of many WTO members and may negatively disrupt business. Japan asked China to give reasonable advanced notice for comment on new draft implementation measures. The United States and Chinese Taipei echoed Japan's concerns. 

China said it had addressed concerns raised about the Cybersecurity Law during the last five CTS meetings.  China said the implementing measures are still being drafted and the Chinese authorities have received suggestions from various interested parties. China was disappointed that Japan had raised the matter again and said some of Japan's own definition of terms in its national regulations, such as "critical infrastructure," were not any clearer than China's.

Cybersecurity measures of Viet Nam

Both Japan and the United States reiterated concerns with Viet Nam's proposed cybersecurity measures. The US said that while Viet Nam's draft decree of 2018 narrowed the scope of an earlier measure, issues such as data localization were still being flagged by foreign services suppliers and that Viet Nam should consider narrowing the scope of the decree further.   Canada, Australia and New Zealand shared the concerns of Japan and the US. 

Viet Nam explained that the 2018 draft decree narrowed the scope of application and reiterated that the legislative drafting process of both the law and the implementing decrees is transparent and democratic.  Viet Nam remains ready to engage and provide fuller explanations if needed, it said.

Other business

The European Union noted that its new consolidated services schedule covering 25 EU member states entered into force on 15 March, some 15 years after the start of the process of amending the EU's schedule of services commitments to reflect the most recent accessions to the EU at the time.  The new schedule modifies the EU's original schedule of specific commitments from 1994 which covered 12 EU members.  The EU has negotiated and successfully completed 17 bilateral compensation agreements with WTO members that had claimed to be affected by the modifications, the EU said.

Appointment of the new CTS chair

At the end of the meeting, members elected Belgium's WTO ambassador Geert Muylle as chair of the CTS.  Amb. Muylle thanked the outgoing chair, Amb. Suescum, for his hard work as CTS chair over the past year.

Working Party on Domestic Regulation

The CTS was preceded by a meeting of the Working Party on Domestic Regulation (WPDR) on 20 March, where members discussed a revised proposal from India to develop regulatory disciplines on measures relating to the temporary entry of natural persons, also known as "mode 4". The proposal was first introduced at a WPDR meeting on 5 December 2018.

India said its proposal had two broad objectives:  rejuvenate discussions in the WPDR, and bring to prominence the need to have commercially meaningful disciplines in the area of mode 4, which is the most important mode of export interests for most developing and least developed members.  India said its proposal received good initial support from these members in December.  Revisions have been made to take account of comments from members on issues such as disciplines on application procedures and requirements for temporary entry, and transparency.  India said global changes in demographics and patterns of investment in human capital have created increased scope for international trade in professional services but that this is inhibited by a range of qualification, licensing and entry-related requirements and procedures; commercially-meaningful disciplines on these procedures can therefore unleash the potential for mutually beneficial trade.

Twenty-seven members took the floor to comment.  Many developing country and LDC members, including the African Group, the African, Caribbean and Pacific (ACP) group of countries and the LDC Group expressed support for the idea of exploring how WTO disciplines in this area could address the challenges faced by their nationals in travelling to other WTO members to provide services.  The commitments of members on mode 4 are significantly behind those for other modes of services supply, some of them said. Several stressed the importance of ensuring sufficient safeguards on the right of member governments to regulate in the sector and the application of special and differential treatment provisions for LDCs.

Developed countries such as the European Union, Australia, Canada, New Zealand and the United States expressed doubts, noting that discussions on horizontal disciplines for all services sectors has lagged in the WPRD for many years.  Several said they were not convinced India's approach offered a way forward and said that India needed to show how her proposal could achieve consensus.  Several developed and developing members said it was hard to see how the WPDR could develop disciplines related to a single mode of services supply, particularly on a sensitive issue such as mode 4. 

The chair, Mr. Henning Envall (Sweden), welcomed the good exchange of views on the proposal and encourage India and other delegations to explore if convergence could be found.  He said he would also consult with delegations on the best way forward. 

Committee on Specific Commitments

The Committee on Specific Commitments met for the first time in two years on 19 March.  The chair, M. Nurbek Maksutov (Kyrgyz Republic), noted that the committee is responsible for overseeing the implementation of specific commitments by members set out in their General Agreement on Trade in Services (GATS) schedules in all modes of supply, examining members' specific commitments with a view to improving their technical accuracy and coherence in the future, and overseeing the application of the procedures for the modification of GATS schedules.  The chair said the committee has been underused, with many issues within its mandate having never been addressed or only partially addressed; he called on members to consider how to make better use of this institution. 

Members reviewed a proposal from the Kyrgyz Republic highlighting what it said were scheduling problems with specific commitments related to mode 4.  The Kyrgyz Republic said many members' mode 4 entries are ambiguous, which allows for significant administration discretion. Lack of clarity and transparency in mode 4 commitments entails legal uncertainty and thus undermine the value of specific commitments, the Kyrgyz Republic argued, with common problems relating to economic means tests (EMTs), the categories of natural persons scheduled, and the relationship between horizontal and sector-specific entries.

Sixteen delegations took the floor to comment, some speaking on behalf of larger groups.  Many of those that took the floor agreed with the need to improve clarity and transparency in relation to the scheduling of mode 4 commitments, particularly with regards to ENTs, definitional issues, and horizontal v. sectoral commitments. Several delegations said some of the issues raised, such as setting common definitions for categories of natural persons, would be challenging for the committee.  The chair said he would consult with members on how the committee should move forward under this agenda item.

The chair also noted that he has been holding extensive consultations with members on possible discussions concerning scheduling and classification issues related to online transactions. Specific issues suggested include whether and how data localization should be scheduled and how platform services should be classified from the GATS perspective.  Some suggested that Members' GATS commitments be updated based on domestic regulatory changes. The chair said he would continue to consult with members on how to move forward under this agenda item.

More information on the WTO and services trade is available here

Understanding the WTO's General Agreement on Trade in Services.

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