Info Service on WTO and Trade Issues (Nov09/11)
Third World Network
domestic regulation proposal to raise ambition level in services?
in SUNS #6816 dated 17 November 2009
16 Nov (Riaz K. Tayob) -- A new proposal on disciplines on domestic
regulation was tabled last week by Switzerland and co-sponsored by several
other WTO Members in the GATS Working Party on Domestic Regulation (WPDR),
which the proponents said raised the level of ambition in services as
well as incorporating the views of other Members and simplifying the
text that is currently under discussion.
Working Party, meeting mainly in informal mode on 11 November, considered
the 20 March 2009 text prepared by the previous Chair of the WPDR, Peter
Govindasamy of Singapore, and entertained initial reactions to
the new proposal that was tabled by Switzerland
and co-sponsored by Australia,
Chile, Colombia, Hong Kong -China,
Republic of Korea
and New Zealand.
meeting considered licensing and qualification requirements (Chapter
V to VIII), the other two elements of its mandate, as well as a shorter
discussion on Technical Standards (Chapter IX) future work and development.
At its last meeting on 9 October, it considered the Technical Standards
chapter of the 20 March text, also referred to as "Peter's text".
[See SUNS #6793 dated 15 October 2009.]
the end of the meeting, there remained different perceptions among some
delegates as to how the new proposal would be treated by Working Party
Chair, Ms. Misako Takahashi of Japan.
to a developing country trade diplomat, different versions of the Swiss
proposal were circulating. The room document introduced by Switzerland
contained 13 paragraphs on licensing and qualifications. Instead of
four chapters on requirements and procedures for both licensing and
qualifications, there are only two chapters. One is on licensing and
qualification requirements, and another on licensing and qualification
the meeting, the Swiss proposal was welcomed as an initial reaction,
but most said that they would have to study the document first, according
to developing country trade diplomats who spoke to SUNS after the meeting.
to a trade diplomat, the Swiss explained that their proposal improved
the level of ambition, it reduced the repetition in the chapters, and
to gain clarity, it "saved words" through a large reduction
in the number of paragraphs. The sponsors welcomed inputs into the shape
and contents of the proposal.
Chile said that the proposal was a
common sense grouping of the common elements to avoid duplication. Australia said
that Members' concerns have been taken into account in the text. The
EC delegate inquired about the level of ambition, saying that he thought
that the Swiss proposal was not an improvement in the level of ambition.
The EC said that the proposal also contained a mistake in paragraph
21 on licensing fees. Fees relate to procedures and not requirements.
Switzerland responded by saying that
it would fix the text for the next meeting.
licensing fees, a developing country trade diplomat said that there
is a setback for developing countries. Peter's text said that licensing
fees must be reasonable, while the Swiss proposal asks for it to be
the issue of licensing fees, Peter's text states that each Member shall
ensure that licensing fees are reasonable in terms of the costs incurred
by the competent authority, including those for activities related to
regulation and supervision of the relevant service, and do not in themselves
restrict the supply of the service (paragraph 26). A footnote explains:
Licensing fees do not include fees for the use of natural resources,
payments for auction, tendering or other non-discriminatory means of
awarding concessions, or mandated contributions to universal service
El Salvador was concerned about the
wording on licensing fees and expressed a preference for the paragraphs
in Peter's text.
US said that they will check the coherence
of the texts because when there is a reduction, something may be lost.
They would check with their capital and come back on this, according
to a developing country trade diplomat. The US also called attention to the issue
of soft commitments in the texts. The issue related to whether there
were different levels of soft commitments for Members, with some commitments
being stronger than others.
Brazil said that the Swiss proposal
is a way to move forward in the negotiations but it must not be burdensome,
according to a trade diplomat. Modifications should not be more burdensome
on regulators or operators. It also expressed concerns about the necessity
test incorporated in many hidden ways into the new draft, citing as
an example the last part of paragraph 21 (referring to licensing procedures,
"not in themselves restrict the supply of the service"). It
was very concerned about the inclusion of the necessity test, as members
already have had lots of discussion and had asked for its removal.
Brazil also asked that terms like
"where possible" and "in principle" be maintained
in the text, as it sought to retain, where needed, the flexibility of
these terms. Brazil also reiterated
the need to include the right to regulate for development. A developing
country trade diplomat explained to SUNS after the meeting that there
were concerns about some terms in the new text which replaced the terminology
of Peter's text. Peter's text uses words like "where possible"
and "in principle", whereas the Swiss proposal uses terms
like "where practicable" or even makes obligations much stronger.
India in its initial reaction welcomed
the text and inquired whether the contents of paragraphs 19 and 34 of
Peter's text were taken into account, according to a trade diplomat.
19, under licensing procedures, states that an applicant shall, in principle,
not be required to approach more than one competent authority in connection
with an application for license. Paragraph 34 states, under qualification
requirements, that where examinations are required, a Member shall ensure
they are scheduled at reasonable intervals and applicants shall be allowed
a reasonable period to submit applications.]
developing country trade diplomat who has followed these issues closely
for years told SUNS after the meeting that there are certain areas where
the level of ambition is higher, but there are also areas where it is
lower. This is just a first reading, he said.
developing country trade diplomats explained to SUNS after the meeting
some of the reactions to issues raised in the meeting. About the
level of the ambition in the text, Chile said that
the new text is more ambitious, as it has eliminated the ambiguity in
words like "in principle" and "where possible" in
the previous text. On the necessity test, Switzerland said that it is in the
mandate for the disciplines. Discussions then moved onto Peter's
text, as explained to SUNS by a few developing country delegates after
the meeting. The US
asked why new disciplines or special requirements for residence requirements
were being made. Korea
said that qualification requirements in paragraph 29 should be removed.
[Paragraph 29 states that residency requirements, not subject to national
treatment scheduling, shall not be a pre-requisite for assessing and
verifying the competence of a service supplier of another Member.]
The US said that for
paragraph 19, it was not possible for just one authority to be approached
to meet licensing requirements, as for it, some services cut across
many sectors and there may be a need to approach many authorities.
According to trade diplomats, Barbados,
for the Small and Vulnerable Economies (SVEs), said that mandatory standards
should be reduced in paragraphs 19 and 32, and that "should"
must replace "shall".
24 states that the processing of an application for a license, including
reaching a final decision, is completed within a reasonable time-frame
from the submission of an application. The US
said time-frames are an internal issue and that this paragraph could
be removed. Regarding paragraph 26 on licensing fees (also discussed
under Swiss proposal paragraph 21 above), the US
said that it was not responsible for fees charged by private entities.
said that in Peter's text, the words "in principle" and "where
possible" should be removed, as these are not legal terms.
Brazil said that a balance had been
reached in Peter's text and that balance should not be modified by new
amendments. It said that the words "in principle" and "where
possible" especially in paragraphs 19 and 23 were indispensable
for them. Australia
questioned the point raised about flexibilities for developing countries.
It said that the words "in principle" and "where possible"
were not legal terms and there could be other wording to meet the concerns
of developing countries. It further said that words like "practicable"
could be used. It asked for more consultations with developing countries.
to trade diplomats, Bolivia said that
it supported views for more flexibilities for developing countries to
reach their policy objectives. Other countries that supported greater
flexibilities for developing countries included Guatemala,
Mexico and Barbados.
27 of Peter's text, under Qualification Requirements, refers to qualification
requirements for the supply of a service, and procedures for their assessment.
On qualification requirements in paragraphs 27 and 28 (of Peter's text),
the US sought to reiterate its previous concerns and said these are
qualification procedures, not requirements. According to trade
diplomats, Brazil asked that
in paragraph 27, the concept of "relevant professional experience"
be clarified, as it is ambiguous. It said that more guidance needed
to be given to regulators. India said that this paragraph applies
to the movement of natural persons, adding that the rules should be
clearer. It said the 2006 version of this paragraph had clearer provisions
on this matter. India
said we have to reduce the exaggerated power in the hands of authorities.
Canada said that paragraph 34 should
be modified, and that Members should be "encouraged".
Paragraph 34 of Peter's text states that Members shall ensure that required
examinations are scheduled at reasonably frequent intervals, and that
applicants shall have a reasonable period to submit applications.
short discussion was then conducted on Technical Standards. Switzerland said that there is need
for the necessity test in paragraphs 16, 26 and 31 (of Peter's text),
as it was in the mandate. It said that the test was needed to avoid
government regulation from being against free trade, and that limits
the provision of the service. According to trade diplomats, the
US said it had made inputs on this
at the October meeting. Brazil
said that we are fully convinced that we do not accept "necessity"
in the text. We have discussed this a lot and we reiterate our position,
it added. Canada said it was not comfortable
with necessity in the text.
moved on to the Development (Chapter X) part of Peter's text. The US said it had not received inputs
on this part and was not prepared to discuss this part.
future work, another meeting will be conducted on 14 December. Work
will cover Chapters 1, 3, 4 and 11 (Introduction, General Provisions,
Transparency, Institutional Provisions, respectively).
seemed to be some different understandings about how the Swiss proposal
was to be treated. Some developing country delegates said they did not
want to see it as an alternative text, as a lot of work has been done
on Peter's text. But they said that they were not clear on how
it will be handled even after hearing the Chair trying to clarify it.
Another trade diplomat said that in its understanding, the Working Party
would consider Peter's text and then consider the proposal from Switzerland. +
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