Info Service on WTO and Trade Issues (Oct16/12)
14 October 2016
Third World Network
India's TFS initiative meets US roadblocks
Published in SUNS #8329 dated 10 October 2016
Geneva, 7 Oct (D. Ravi Kanth) -- India's "concept note"
for crafting a Trade Facilitation in Services (TFS) agreement at the
World Trade Organization received support from various countries on
Thursday (6 October), but the United States cast doubts on New Delhi's
The US questioned whether the Indian initiative can be compared to
the Trade Facilitation Agreement (TFA) in goods and whether it will
lead to a developed versus developing country battle, services negotiators
The US, however, welcomed another proposal from a group of industrialized
and several developing countries for addressing "administration
of measures" for developing licensing requirements and procedures,
qualification requirements and procedures, and technical standards
to be addressed separately.
That proposal was tabled by Australia, the European Union, Chile,
Colombia, Mexico, Norway, Republic of Korea, and Chinese Taipei and
seeks to address elements related to "Transparency, Development,
and Institutional Provisions".
At a meeting of the WTO's Working Party on Domestic Regulation (WPDR),
Australia presented the proposal on "administration of measures"
for developing licensing requirements and procedures, qualification
requirements and procedures, technical standards, and transparency.
Australia said members needed more "certainty" in the administration
of measures. It argued that the group will present more proposals
in the coming days along with the negotiating texts.
The EU said that it is a co-sponsor of the proposal which needs to
be addressed on a strong footing in the coming months.
Chile, Japan, and Chinese Taipei among others supported Australia
in demanding negotiations on these issues.
The proposal on "Administration of Measures" for negotiation
in the GATS Working Party on Domestic Regulation (WPDR), according
to Australia, covers elements of domestic regulation related to the
administration of licensing requirements and procedures, qualification
requirements and procedures, and technical standards.
It also includes a General Provisions paragraph on the scope of application
to facilitate Members' consultations on the proposed disciplines,
Australia said, according to services negotiators present at the meeting.
The US said it is open to discussing the issues listed in the Australian
proposal, arguing that the "administration of Measures"
is important for trade in services.
Several developing countries as well as China raised questions on
the proposal circulated by Australia and others.
China sought to know whether it is consistent with the GATS Article
6.4 which deals with developing general disciplines for all professional
services and, where necessary, additional sectoral disciplines.
But the negotiations on improving disciplines in the domestic regulation
have remained in the doldrums since 1998 because of opposition from
a major developed country - the United States - which had opposed
the two drafts texts issued in 2009 and 2011 by the then chairs of
After the discussion on the joint proposal on "Administration
of Measures," India formally introduced its two- page "concept
note" on "Trade Facilitation in Services" agreement
for removing barriers and bottlenecks that impede global trade in
India said while the existing Trade Facilitation Agreement for goods
which was concluded at the WTO's ninth ministerial meeting in Bali,
Indonesia, in December 2013, addressed the simplification of customs
procedures, it wants a similar agreement for doing away with the numerous
hurdles in global trade in services.
The concept note, according to India, will address several cross-cutting
issues such as "transparency, streamlining procedures, and eliminating
bottlenecks" for facilitating trade in services.
India also listed the specific issues in the four modes of supply
of services under the General Agreement on Trade in Services. The
(i) Facilitation of free flow of data across borders for ensuring
meaningful supply of Mode 1 services.
(ii) Mode 2: Facilitation of supply of Mode 2 services, including
through cross-border insurance portability for availing of medical
or tourist related services in a foreign country. Endeavour to streamline
temporary entry formalities, such as visa processing fees, procedures
and timelines for consumers seeking entry into another country to
avail of services (such as medical services, education services, tourism,
(iii) Mode 3: Facilitation of supply of Mode 3 services, including
through measures such as single window clearance for setting up commercial
presence. Disciplines on charges applicable on Mode 3 service suppliers,
in order to ensure that these do not unfairly disadvantage foreign
(iv) Mode 4: Facilitation of supply of Mode 4 services through simplification
of procedures for temporary entry and stay, and clarity in respect
of work permits and visas as relevant for the categories of the Mode
Disciplines on measures relating to taxation, fees/charges, discriminatory
salary requirements, social security contributions in relation to
temporary entry, etc. in order to ensure that these do not unfairly
disadvantage foreign service suppliers.
China thanked India for its concept note for facilitating trade in
services without bottlenecks. China, however, maintained that it will
need time to offer concrete suggestions from its capital which is
currently on holiday.
The European Union said it remains open to the Indian concept note.
Several other developing and poorest countries from Africa, Asia,
and South America supported India's concept note.
But the US posed a volley of questions on the Indian paper and asked
what it intends to achieve, according to negotiators present at the
The US maintained that TFA had consensus among all members when it
attempted to bring about improvements in freedom of transit (Article
V), fees and formalities connected with importation and exportation
(Article VIII), and publication of administration of trade regulations
The US' position on TFA, according to a developing country negotiator,
is inaccurate as there was no consensus on the TFA when it was introduced
or even concluded at Bali.
"The consensus was manufactured through strong-arm tactics by
the US when it forced the African countries in May, 2014 to agree
to the protocol," the official said.
India's concept paper, according to the US, also posed the risk of
transforming the discussion into a developed versus developing country
The US said that the special and differential flexibilities proposed
in India's paper on TFS can only involve longer time periods for implementing
the agreement as in the Trade Facilitation Agreement but not result
in new concessions for developing countries.
The US also sought to know from India whether its proposal will need
a new mandate that goes beyond the current mandate of the WTO's Working
Party on Domestic Regulation.
In a separate development on 5 October, the US and Brazil joined hands
in whittling away two subsidiary bodies - the Working Party on GATS
Rules (WPGR) and the Committee on Specific Commitments (CSC) - of
the Council for Trade in Services.
Brazil, which refused to put a concrete proposal in writing for discontinuing
these two bodies, succeeded in forcing a decision with the help of
the US despite opposition from many developing countries.
Disturbingly, the proponents seeking work in these two bodies - the
Working Party on GATS Rules and the Committee on Specific Commitments
- remained silent when Brazil and the US managed their way through
an oral brainstorming presentation.
The two countries claimed that these two bodies have become redundant
over the years without any significant contribution, said a services
negotiator from a South American country, who asked not to be quoted.
The Chairs of these two bodies (Argentina for WPGR and China for CSC)
will hold consultations to determine if there is a need to convene
The effect of this is the de facto suspension of the work in these
two bodies, said another trade official.
The question of continuing the work in the Committee on Trade in Financial
Services also cropped up during the meeting of the CTFS.
It is an open secret that developed countries who refuse to acknowledge
or even talk about the role they played in the global financial crisis
have frustrated any work in the CTFS, the official said.
In a nutshell, the three meetings showed that while developing countries
remain disunited in advancing their developmental proposals, the industrialized
countries along with a group of developing countries are able to push
their proposals with little resistance, several developing country
negotiators said. +