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TWN Info Service on WTO and Trade Issues (Jul16/06)
12 July 2016
Third World Network


Several South nations coalesce around Indian TFS proposal
Published in SUNS #8277 dated 7 July 2016


Geneva, 5 Jul (D. Ravi Kanth) -- Several developing and least-developed countries on Monday (4 July) coalesced around India's proposal for pursuing negotiations at the World Trade Organization on Trade Facilitation in Services (TFS) to cut down transaction costs associated with unnecessary regulatory and administrative burdens on cross-border movement of services, several negotiators told the SUNS.

Surprisingly, the champions of the Trade Facilitation Agreement (TFA) in goods - the United States, the European Union, Japan, Canada, and several other developing countries who were members of the Colorado group - remained silent on India's proposal for negotiating a TFS agreement on the lines of what was accomplished in TFA for goods in 2014, an African trade negotiator told the SUNS.

While silent on the proposed TFS, the US however said, in its non-paper on electronic commerce work program, that members must consider "ensuring faster, more transparent customs procedures: The sort of provisions contained in the WTO Trade Facilitation Agreement can make very direct contributions to digital trade. Administrative and at-the-border barriers can often be a bigger problem than tariffs for exporters of digital equipment."

A large majority of developing, least-developed, and many developed countries also signalled their willingness to pursue negotiations in the unfinished business of the Doha services negotiations, particularly market access and domestic regulation.

The US, which is leading the plurilateral negotiations on Trade in Services Agreement outside the WTO, however, chose to remain silent on the unfinished market access and domestic regulation negotiations.

However, the developed countries led by the European Union, the United States, Canada, and Japan (the erstwhile Quad countries) along with their allies in the developing world such as Mexico, Hong Kong, Singapore, Korea, Chile, and Argentina pressed for starting negotiations on electronic commerce/digital trade.

The US presented a non-paper on the e-commerce/digital trade work program even before members completed negotiations on the outstanding issues in the Doha services negotiations.

These conflicting demands, almost on North-South lines, over the unfinished Doha services negotiations, came into full display at an informal open-ended meeting of the Doha services negotiating body at the WTO on 4 July.

The chair for Doha services negotiations, Ambassador Gabriel Duque, sought to know from members on how to continue work after the summer break in September. During the previous informal session on 3 May, said Ambassador Duque, members pressed for resuming negotiations on domestic regulation (DR) and market access (MA).

The Colombian chair suggested that work on LDC issues also should be taken up along with digital economy and TFS. He said a balanced outcome is needed without resorting to sequencing issues in other areas.

Against this backdrop, said Ambassador Duque, members must spell out their positions on different areas so as to prepare a work program for the eleventh ministerial conference in December 2017, according to people familiar with the development.

India, which was the first to take the floor, said that it is a major "demandeur of a holistic outcome on Services covering both DR and MA, in keeping with the GATS mandate, Negotiating Guidelines & Procedures and all the Ministerial Decisions including the Annex C of the HKMD [Hong Kong Ministerial Declaration]."

Among other things, the HKMD in Annex C emphasized that "members shall strive to ensure a high quality of offers, particularly in sectors and modes of supply of export interest to developing countries, with special attention to be given to least-developed countries."

Significantly, the HKMD called on members to "achieve progressively higher levels of liberalization with no a priori exclusion of any service sector or mode of supply and shall give special attention to sectors and modes of supply of export interest to developing countries. Members note the interest of developing countries, as well as other Members, in Mode 4."

India said it wants substantial and comprehensive outcomes in "Mode 1 [cross-border], Mode 4 [movement of natural persons] and disciplining of domestic regulations, including in areas such as qualification requirements and procedures [which are critical for India]."

Taking a dig at those countries which are pursuing the TISA negotiations, India maintained that members must get "back to the full mandate of Services negotiations under the CTS-SS." India called for intensifying efforts to achieve rapid progress in services negotiations in each of the pillars of the services negotiations especially in areas such as Market Access, Domestic Regulations and LDC Services Waiver to achieve progressively higher levels of liberalization of trade in services.

Given the "numerous border and behind-the-border barriers as well as procedural bottlenecks, which are impediments to the realization of the full potential of services trade," India said that there is a crying need for Trade Facilitation in Services (TFS) Agreement on the lines of the Trade Facilitation Agreement (TFA) in goods adopted by WTO members in 2014.

The TFS Agreement, India said, "should address the key issues that are pertinent to facilitating trade in services, such as transparency, streamlining procedures and eliminating bottlenecks." Further, a comprehensive TFS Agreement will ensure "that the commitments that were taken in the Uruguay Round are implemented in a meaningful manner and also provide the basis for realization of benefits from improved commitments in future negotiations."

The TFS Agreement will be based on strong special and differential treatment provisions as set out in the TFA, India maintained. India said it will circulate a written proposal on TFS soon, according to people familiar with the development.

China said it is looking forward to India's proposal on TFS, emphasizing that it would require urgent discussion on such a constructive proposal, said a negotiator who asked not to be quoted.

Turkey said "TFS is a great idea and will look forward to India's proposal." Uganda welcomed India's proposal on TFS while a representative for the LDCs said that their group is ready to engage on the Indian proposal.

Several countries - Nigeria, the EU, Singapore, Japan, Hong Kong, Canada, Korea, Mexico, Chinese Taipei, Colombia, Norway, Chile, China, Australia, Turkey, South Africa, Argentina, and Russia - among others supported India's demand for intensifying negotiations in domestic regulation.

Many countries - India, New Zealand, Singapore, Japan, Hong Kong, Canada, Korea, Mexico, Chinese Taipei, Colombia, Switzerland, Norway, China, Turkey, and Thailand - pressed for intensifying market access negotiations.

In sharp contrast to demands for negotiations on domestic regulation and market access, the developed countries and several developing countries rallied around the United States for pursuing negotiations on electronic commerce/digital trade. The US presented a three-page non-paper on Friday (1 July) for launching a work program on e-commerce.

The non-paper by the US suggested several examples in e-commerce work program that members must consider for an outcome. The examples include:

* PROHIBITING digital custom duties;

* SECURING basic non-discrimination principles;

* Enabling cross-border data flows;

* Promoting a free and open Internet;

* Preventing localization barriers;

* Barring forced technology transfers;

* Protecting critical source code;

* Ensuring technology choice and authentication methods;

* Safeguarding network competition;

* Fostering innovative encryption;

* Building an adaptable framework for digital trade;

* Preserving market-driven standardization and global interoperability;

* Ensuring faster, more transparent customs procedures: The sorts of provisions contained in the WTO Trade Facilitation Agreement can make very direct contributions to digital trade. Administrative and at-the-border barriers can often be a bigger problem than tariffs for exporters of digital equipment;

* Promoting transparency and stakeholder participation in the development of regulations; and

* Recognizing conformity assessment.

In a nutshell, the US is advancing a maximalist agenda on e-commerce/digital trade without addressing the issues of domestic regulation and market access negotiations as set out in the Doha work program, trade negotiators told the SUNS. +

 


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