Services

Domestic Regulation:

Since the Nairobi Ministerial Conference in 2015, consultations among members have not produced proposals to reinvigorate negotiations on market access.  However, a number of members have identified domestic regulation as a topic on which progress can be made by the 11th Ministerial Conference in Buenos Aires (MC11).

Article VI.4 of the WTO's General Agreement on Trade in Services (GATS) calls upon WTO members to develop any necessary disciplines to ensure that measures relating to qualification requirements and procedures, technical standards and licensing requirements and procedures do not constitute unnecessary barriers to trade in services. Since 1999, following the adoption of disciplines on domestic regulation for accountancy services, discussions on disciplines cutting across services sectors have been taking place in the Working Party on Domestic Regulation (WPDR).

Building on a number of specific proposals put forward since 2016, a group of 23 co-sponsors (51 if counting EU member states individually) provided a consolidated text proposal, updated last in November 2017.

For these delegations, the text seeks to ensure that rules on licensing and qualification requirements and procedures, and technical standards are clear, transparent and predictable. The objective is to make it easier for  service suppliers to  use existing market access commitments provided by Members.

In their view, opaque and cumbersome on-the-ground procedures adversely affect small and medium sized enterprises that wish to supply services to foreign markets.

Co-sponsors propose disciplines to apply to measures relating to licensing and qualification requirements and procedures, and technical standards, in sectors that Members have liberalized in the WTO.  

The majority of proposed provisions seek to facilitate the licensing and qualification process for service suppliers.  Proposed disciplines relate to the establishment of application timeframes, the possibility of electronic application and acceptance of copies, timely processing of applications and communication with applicants, reasonable and transparent authorization fees, and examinations at reasonably frequent intervals.  The proposal also foresees procedures to be impartial and not to unduly prevent fulfilment of requirements.

The proposal also seeks to ensure that measures falling under the purview of the disciplines are based on objective and transparent criteria, and that competent authorities reach and administer their decisions in an independent manner.

In addition, co-sponsors propose to enhance transparency of requirements and procedures by specifying that relevant information related to licensing, qualification and technical standards needs to be published or otherwise be made available, and that such information needs to be provided to service suppliers.  The transparency proposal also foresees publication of draft laws and regulations of general application, with a view to permitting comments by interested persons and other members.

The proposal further seeks to ensure that technical standards adopted by  a member  would be developed through open and transparent processes.

Two subgroups of proponents have proposed disciplines on gender equality, which would  ensure that licensing and qualification measures do not discriminate on the basis of gender, and the necessity test, which requires that measures are not more burdensome on services providers than is necessary to assure the quality of the service. .

Many provisions in the text are to be carried out "to the extent practicable" or contain other language providing flexibility in Members' implementation.

Members' views diverge on prospects for a short-term outcome on domestic regulation.

At a meeting of the Working Party on Domestic Regulation (WPDR) on 7-8 November, WTO members expressed different views on whether existing proposals might form the basis for an outcome that could  be achieved by MC11.  Proponents and some other members called for further work to bridge differences between members.   Several other members, who expressed interest in the development of domestic regulation, considered that the time until the MC11 was too short to narrow the remaining gaps, and members with more fundamental difficulties reiterated their view that the proposals did not provide a basis for convergence by MC 11. The Chair, Ms Katarzyna Stecz (Poland), concluded that she saw no scope for preparing a Chair's negotiating text, if such a text was meant to lead towards a consensus outcome in the coming weeks.

Some members reiterated fundamental difficulties with the draft text submitted by proponents, expressing concerns that such proposals may impede  their ability to regulate. They also raised  doubts about the benefits that the disciplines would bring to their respective countries.  These members questioned the need for disciplines, and whether some of the proposed provisions were in line with the original mandate for the negotiations.

MC11 Outcome:

Discussions on domestic regulation of services took place among the membership at MC11, with Paraguay's trade minister Eladio Loizaga Caballero serving as Facilitator for the talks.  Delegations remained divided over the joint paper presented in Buenos Aires setting out proposed disciplines on the domestic regulation of services (WT/MIN(17)/7), and the Facilitator concluded it would be difficult to achieve consensus at MC11 on the way forward. A group of 60 WTO members issued a joint ministerial statement at the end of the meeting reaffirming their commitment to advancing the talks and calling upon all members to intensify work with the aim of successfully concluding the negotiation on domestic regulation disciplines in advance of the next ministerial conference in 2019.