The proposal to advance the discussion on the Services Waiver was put forward by the LDC Group, which proposed that the Council for Trade in Services (CTS) hold a virtual workshop, tentatively in the first quarter of 2021, to bring together LDC service suppliers and consumers of LDC services in members that had granted preferences under the Waiver.
The LDC Group also announced that it planned to organize a webinar in November to address how COVID-19 is affecting the supply of services from LDCs and what measures members are taking to mitigate the pandemic's impact. The Group also requested the WTO Secretariat to update the data on LDC services trade prepared for the dedicated session held last year on the operationalization of the Services Waiver.
Developing country members underscored the importance of the Services Waiver and were generally supportive of the LDCs' workplan. It was also suggested that a possible follow-up on “LDC services platforms” might share more focused information on the operationalization of the Waiver. Given the novelty of the proposal, developed country members called on the LDC Group to submit their plan in writing. The LDCs confirmed they would do this.
A review of the Waiver was mandated by the 2015 Nairobi Decision. A services waiver was first established in 2011 allowing WTO members to grant more favourable treatment to LDC service suppliers. The Nairobi Decision extended the waiver until 31 December 2030. The purpose of the Waiver is to enhance the participation of the world's poorest countries in world services trade.
Members welcomed the information note presented by the WTO Secretariat on “Trade in services in the context of COVID-19”, which aims to provide information on the impact of the pandemic on trade in services in various sectors and modes of supply. The note highlights the services sectors most affected, such as tourism, transport and distribution services, which have suffered as a result of mobility restrictions and social distancing measures imposed for public health reasons.
Moreover, the crisis is leading to a greater focus on online supply in sectors such as retail, health, education, telecommunications and audio-visual services. Suppliers are accelerating efforts to expand their online operations and consumers are adopting new habits that may contribute to a long-term shift towards online services. Similarly, the increased use of online services during the pandemic has accentuated technology and connectivity disparities. For example, virtual schooling is not feasible for students without computers and telework is a challenge for employees without broadband.
Overall, the crisis is further underscoring the importance of services that enable online supply, such as telecommunications and computer services, as well as the broader infrastructural role of financial, transport, distribution and logistics services in facilitating merchandise trade and economic growth. Services sectors, and the creation of conditions conducive to trade in services, will be key to the recovery from the economic slowdown, the note concludes.
Members stressed that trade-restrictive measures in services implemented in response to COVID-19 must be transparent, timebound, non-discriminatory and proportionate. One member said that the pandemic has highlighted the importance of cross-border movement of health professionals, emphasizing the need for members to facilitate such movement. Some members also underlined the disproportionate effect the pandemic has on developing countries, particularly African countries, given the limited financial resources they have available to support their economies during the crisis.
E-commerce Work Programme
A joint communication proposing exploratory discussions on supporting digital capability of business and consumers, which had been initially tabled in July, continued to generate substantive engagement. Several delegations presented information on their respective initiatives to support digital capabilities, and one member shared its experience in promoting the development of the domestic e-payment sector. The crucial role of e-commerce to economic growth and development was underlined while it was stressed that COVID-19 had further accentuated this.
While acknowledging the benefits of e-commerce, other members said that the E-commerce Work Programme discussions had not focused sufficiently on the challenges posed, including the digital divide, excessive market concentration and effective taxation of digital firms. They said that the extension of the e-commerce moratorium, under which members agree to not impose customs duties on electronic transmissions until the next Ministerial Conference, had harmful implications for developing countries, in terms of revenue and measures towards digital industrialisation.
In two separate agenda items, China expressed its concern about restrictions by the United States and India. On the first item, China addressed the US measures targeting the video application TikTok and messaging application WeChat. China said that these orders violated the WTO's most favoured nation (MFN) principle and the transparency and domestic regulation obligations of the US under the General Agreement on Trade in Services (GATS) in a number of sectors, including computer-related, advertising, telecommunication, audio-visual and entertainment services. The US responded that the actions cited by China serve to protect US national security.
On the second item, China registered its concerns about India taking a series of measures on trade in services on two fronts — the prior approval requirement for acquisitions of Indian companies in the context of COVID-19 from countries that share a land border with India, and measures banning the use of 234 apps in India, most of them developed and operated by Chinese internet companies. China argued that those measures violated the MFN, transparency and domestic regulation obligations and India's GATS commitments in a number of sectors, including computer-related, telecommunication, audio-visual and financial services. India replied that its measures were fully compliant with WTO rules and called on China to work on improving transparency and maintaining an open trade regime for digital services.On other issues previously addressed at the Council for Trade in Services, Japan and the US reiterated their concerns about China's and Viet Nam's cybersecurity measures. China reaffirmed its concerns about Australia's 5G measures. The US repeated its concerns, and requested clarifications, about two Russian measures concerning the allocation of radio frequency bands for foreign satellite operators and the pre-installation of software. Some of the preoccupations expressed were echoed by other members.